The governor had separate meetings with Budhiraja and Bansal at Raj Bhavan. While Budhiraja explained the current financial situation, Bansal briefed the governor about the plan process for the next year.

Normally, the Governor calls the Chief Secretary to seek information on major developments in the state. In fact, the Chief Secretary himself calls on governor in September-October to brief him on the plan process. The fact that Dr Alexander chose to alter the norm on this occasion is indicative of growing concern about the financial affairs of the state, political observers here feel.

Top bureaucrats too haverefused to buy the claims of Chief Minister Manohar Joshi and Finance Minister Mahadev Shivankar on financial stability. They strongly feel that the alliance government will have to cut the ``unrealistic'' plan size by at least 25 per cent to tide over the unprecedented financial crisis. ``There is no other way but to impose a cut of 25 per cent to garner Rs 1000 crore for development work and payment of Rs 700 crore to the contractors of the Krishna Valley Development Corporation,'' a senior official pointed out.

On the other hand, though Shivankar admitted that there was some strain on state's economy, he maintained that there was no need to cut the plan size. ``We have not gone bankrupt as has been described by the opposition. Certainly, there is some pressure on state's economy, which is not uncommon,'' Shivankar said.

Shivankar said there are two indicators of efficient management of state's economy. Firstly, whether it is paying salary to its employees on time and whether the government has drawn anoverdraft to tackle the financial situation. The alliance government has neither delayed the wages nor has it drawn an overdraft, Shivankar claimed.

However, there are no takers for the arguments advanced by the Chief Minister and the Finance Minister. According to a senior bureaucrat, a cursory glance at the economic performance of the government is enough to conclude that Maharashtra is no more a financially stable state as it was in the past.

When the alliance government came to power in March 1995, the size of the plan was of Rs 6062 crore, in the subsequent year, it was Rs 8284 crore, in 1997-98 it was Rs 8393 crore, while in 1998-99, it was highest ever - Rs 11600 crore. By and large, the annual increase in the size of the plan is by 10 to 15 per cent, however in 1998-99, it was more than 30 per cent.

In fact the then Deputy Chairman of the Planning Commission, Madhu Dandavate and Joshi's cabinet colleagues too had asked him to make the plan size realistic. However, the government chose to ignoretheir advice, and said it will mobilise additional resources through the Maharashtra State Electricity Board and the Maharashtra State Road Transport Corporation.

The alliance government had estimated that besides stepping up revenue collection, particularly from excise and sales tax, it will mobilise Rs 450 crore by way of increasing the fares of the state transport corporation-run buses, water tax and hike in electricity charges. ``It is true that the alliance government had promised to garner Rs 450 crore, but so far, barring the hike in electricity charges, no concrete steps have been taken in this direction'' the official said.

The cash-starved government also proposes to impose a cut of 20 per cent on the non-planned expenditure to mobilise additional Rs 200 crore.

During his weekly media briefings, Joshi has repeatedly justified the numerous loans taken by his government, saying, they were essential for development. ``Loans have been raised in public interest. We have to complete the tasks in atime bound period, something which the Congress government could not do in three decades,'' Joshi had remarked

Besides the unrealistic plan size, the Krishna Valley Development Corporation, the irrigation corporations set up for each of the Revenue Division and the Maharashtra State Road Development Corporation have raised bonds worth Rs 3800 crore, while the Rural Development Department has drawn a Rs 7000 crore action plan to provide drinking water to all villages by the end of the year 2000.

Despite government's optimism on this front, it has already run into problems. A senior official informed that a section of bureaucrats had warned that if these corporations failed to make repayment, the government will have to bear the burden of making the payments as also the interest on the sum. ``For the current year, the interest on bonds will be about Rs 670 crore,'' the official revealed.

As a case in the point, the government is caught in the predicted scenario over payment to contractors of KrishnaValley Development Corporation. Since the corporation was unable to make the payment, the government had to shell out Rs 100 crore for the purpose.

Moreover, the alliance government will also have to pay wages to its employees as per the recommendations of the Fifth Pay commission. The additional burden on this account will be around Rs 10,000 crore, including arrears to more than 19 lakh employees. According to Shivankar, while a budgetary provision of Rs 5,000 crore has been made for the purpose, arrears will not be paid to the employees, instead the amount will be deposited in their provident fund account.