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It’s tax(ing) time in Himachal Pradesh
Budget proposals to garner Rs 15 cr
Tribune News Service

Shimla, June 8
Fresh taxes to garner additional resources to the tune of Rs 15 crore have been proposed in the Rs 6893.61 crore reform-oriented Budget for 2004-05, leaving a deficit of Rs 703.79 crore uncovered.

Presenting the budget, Mr Virbhadra Singh, Chief Minister, who also holds the finance portfolio, said the fiscal position of the state continued to be grim as revenue receipts, mainly comprising central transfers, had not kept pace with the expenditure needs. The revenue receipts grew by 13.3 per cent during 1999-2001 whereas the revenue expenditure shot up at the rate of 15.7 per cent per annum. Revenue deficits had been a chronic feature since 1988-89 and the total debt, including guarantees, stood at Rs 15000 crore at the end of 2002-03.

Besides the modest dose of taxes, several corrective measures like debt swapping and curtailing unproductive expenditure have been outlined in the Budget to contain the deficit.

Cement will become dearer with proposed increase in the tax on its carriage from Rs 4 to Rs 4.50 per 50 kg. Tobacco products will also cost more with the levy of carriage at the rate of Rs 2 per kg. The two measures will net a revenue of Rs 6.65 crore. Further the rates of special road tax are proposed to be increased by 3 per cent to capture the increase in average occupancy in buses to fetch a revenue of Rs 6 crore.

In another important measure the additional goods tax on cotton yarn being produced in the state has been increased from 10 paise to 30 paise per kg. It will help raise an additional Rs 2.30 crore annually.

The year will open with a negative balance of Rs 770.93 crore. The receipts are estimated at Rs 4,241.35 crore against the projected revenue expenditure of Rs 5,791.07 crore, leaving a deficit of Rs 1,549.71 crore on the revenue account. After raising public debt of Rs 2,517.23 crore and taking into account the capital expenditure, including repayments and advances the year will close with a cumulative deficit of Rs 703.79 crore.

The actual figures of 2002-03 show that the total income of the state actually declined by Rs 57 crore from Rs 3,715 crore in 2001-02 to Rs 3,658 crore in 2002-03. It was a matter of grave concern since the total expenditure of the state, including revenue and capital expenditure, shot up from Rs 5,420 crore in 2001-02 to Rs 6,713 crore in 2002-03, an increase of about Rs 1,300 crore, he added.

He said the signing of an MoU on fiscal reforms was a major step towards finding a permanent solution to the financial crisis plaguing the state.

He said the Budget was a continuation of the policies initiated by the government last year which had reversed the trend of decline in the rate of economic growth from 1998-99 to 2002-03 when it touched the lowest rate of 4.3 per cent. In 2003-04 the state achieved an economic growth rate of 7.9 per cent.

The Chief Minister said debt management had been a major achieve achievement of the government, which swapped over Rs 2,300 crore loans in a short period of just over an year, reducing the interest liability by nearly Rs 100 crore per annum. He announced that debt swap would be an important ingredient in the coming years in the state’s effort to improve its financial position. A plan size of Rs 1,400 crore has been proposed for the current year.

The reforms will have a human face and the social sector will remain the top priority . The social security net in the form of pensions for aged, widows and handicapped have been expanded. The government had sanctioned over 28,000 additional pension cases in this calendar year, bringing the total coverage to about 2 lakh beneficiaries.

The policies for development of Scheduled Castes will be re-oriented. The special component plan implementation will be made more effective. Electrification of left-out Scheduled Castes households will be given top priority this year.

Under the Rs 532 crore Sarva Shiksha Abhiyan launched last year in the state as many 4,000 rooms for middle schools will be constructed by the year-end.

The Chief Minister announced the government’s decision to have an equity participation of 30 per cent in the Rampur hydroelectric project. Similar equities would be ensured in other hydroelectric projects, he said.

The scope of PMGSY will be expanded by adopting cluster approach after revising the core plan based on the 2001 census data. More villages and habitations will be covered so that people of remote areas have road connectivity.

Over 39,000 new families would be covered under the Antuodaya Anna Yojana this year and the Rajiv Gandhi Awas Yojana would be extended to provide houses for the houseless and weaker sections of society.

The panchayats and other local bodies will be given more powers. They will be assigned supervisory role over village and panchayat-level functionaries of various departments. Their resource base too will be enhanced through a series of devolutions.

The Chief Minister announced the rationalisation and simplification of the excise and taxation laws. Police and jails administration would be modernised to strengthen law and order enforcement.

Over one lakh new jobs in industry, service sector and in the government will be created, said the Chief Minister. The state had attracted new investment proposals worth Rs 5,000 crore last year.
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