State Budget under drought cloud

Published in The Hitavada on March 21, 2013

State presents drought-centric budget, curtails plan size

* Special tax proposals to raise funds for tackling drought

By Kartik Lokhande

MUMBAI, March 20: Trying his best to strike a balance between budget cut and drought relief, Deputy Chief Minister and Finance Minister spelt out some tax proposals to raise funds for drought mitigation. At the same time, he curtailed plan size of the budget.

Presenting the budget in Legislative Assembly on Wednesday, Pawar said at the outset, “The State is facing drought situation frequently due to its peculiar geographical reasons. We face some new challenges every now and then. However, some minimum permanent measures are required to be planned for this. Accordingly, the Government has done planning and will be spending maximum allocations on them.”

Stressing that the drought relief would require huge funds, Finance Minister announced temporary tax proposals. He announced to raise tax on gold, silver, diamond, precious metals, and their jewellery by 0.1 per cent. Besides, he proposed to increase tax on purchase of water-intensive sugarcane crop from existing three per cent to five per cent. These tax proposals will be effective for one year and they would generate additional revenue of Rs 1,150 crore. Later, Pawar told reporters that increase in taxes on liquor, cigarette, beedi, tobacco, paver blocks etc would further add to the revenue and this would help in tackling drought more effectively.

For 2012-13, the minister said, revised revenue receipts were pegged at Rs 1,44,622.70 crore and expenditure at Rs 1,36,559.21 crore, leaving the State with revenue surplus of 152.49 crore. However, he added in his speech, the revised revenue surplus was at Rs 26.51 crore only. For 2013-14, he expected revenue receipts to be Rs 1,55,986.95 crore and expenditure to be Rs 1,55,802.57 crore, spelling a surplus budget of Rs 184.38 crore.

The plan size of the budget was Rs 49,000 crore previous year.  This time, Pawar stated that the plan size would be Rs 46,938 crore, indicating curtailment. Of the annual plan size, which is yet to be approved by Planning Commission of India, 15 per cent amount would be spent on measures relating to drinking water supply, keeping in view drought situation. He admitted that 62.5 per cent of the revenue expenditure was due to salary, wages, pension, and debt repayment, but said that fiscal deficit and other indicators of State’s economic health were pretty good and conformed to norms.

“Instead of increasing tax burden, I have focused more on plugging tax leaks and evasions and increasing recovery thereby. While offering helping hand to drought-affected areas, I have tried to address concerns of other regions of the State also,” Pawar said while talking to reporters after the budget. Chief Minister Prithviraj Chavan also agreed to it and said that the budget was a balanced one. He expressed satisfaction that almost 25 per cent of the plan was devoted to ensuring water security through long-term measures. According to Chavan, Pawar did justice to all the departments. Chief Minister added that agriculture and allied sectors were given Rs 3,500 crore, power sector got Rs 3,375 crore, transport got Rs 5,291 crore, water resources and flood control got Rs 8,380 crore, rural development got Rs 1,464 crore, social sector including health and education got maximum Rs 20,918 crore in the budget.

Budget highlights

·         Rs 346.75 crore for agricultural loan at subsidized rates

·         Rs 7,249.70 crore for irrigation projects

·         Rs 5,200 crore for district annual plans

·         Rs 2,500 crore for industrial promotion subsidy

·         Rs 939 crore for electricity subsidy for powerlooms

·         Rs 325 crore for Rajiv Gandhi Jeevandayi Yojana implementation across the State

·         Rs 100 crore for construction of girls’ hostels

·         Rs 266.82 crore for non-salary grants to private primary, secondary, and higher secondary schools

·         Rs 452 crore for computer training in 8,000 schools

·         Rs 2,716.67 crore for road development

·         Rs 1,902 crore for Mahagenco power plants

·         Rs 317.17 crore for modernization of police force

·         Rs 149.78 crore for CCTV surveillance in Mumbai and Pune

·         Financial institutions made liable to pay stamp duty on mortgage deeds

·         Rs 123.11 crore for development of allied basic infrastructure in consonance with new Industrial Policy

·         Increase in authorized share capital of various corporations

·         Rs 280 crore for minority development schemes

·         Total exemption from entertainment duty payment for seven years to single-screen cinemas in villages, for five years to smaller towns/cities to enable them to get equipped with modern digital technology

·         71 new Revenue sub-divisions to be created in State

Cheaper: Braille watches, vehicles for handicapped, AICD heart implant, excavators, rice bran, hand pumps, water meters, judicial and non-judicial stamps, philatelic material. 

Costlier: Gold, silver, jewellery, sugar (on account of hike in tax on sugarcane purchase), beedi, cigarette, tobacco, paver blocks, country liquor, Indian made foreign liquor, strong beer, lottery, cosmetics and shampoo, industrial fabric, non-alcoholic beverages.

No change: Essential commodities mainly including foodgrains, Solapuri chadar and towels, wet dates, currants and raisins, tea

Revenue surplus budget with leadership deficit: Oppn

The Opposition parties flayed the State Budget for the year 2013-14 saying that it would prove to be a ‘deficit budget’ at the end of financial year.

Addressing a press conference after the budget, Leaders of Opposition Eknath Khadse (Assembly) and Vinod Tawde (Council) said that number-jugglery was done to hide real picture. “Actually, budget cut has helped the Government project the budget as revenue surplus. Of a total budget proposed, only 12.31 per cent is allocated for capital expenditure, which will affect developmental works severely,” said Khadse. He also criticised the Government for not offering special relief package to drought-affected areas.

The debt stock of the State has risen to Rs 2,70,000 crore in the said budget, Khadse told reporters. With this, he added, Maharashtra has earned the dubious distinction of being at the top of most indebted states in the country. He also expressed strong displeasure on negative growth rate of agriculture and allied sectors, and 18 per cent dip in foodgrains production, as projected in Economic Survey of Maharashtra released a day back. Overall, said Tawde, the budget hinted at ‘leadership deficit’ in Maharashtra.