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Budget figures
Oppn tirade against Badal govt lacks ‘sting’
Ruchika M Khanna
Tribune News Service

Chandigarh, March 18
The hue and cry created by the Opposition parties in Punjab, over the alleged “fudging” of figures in the Budget proposals for the coming financial year, may well turn out to be a storm in a teacup.

The Opposition tirade against the SAD- BJP government is based on the difference in budget estimates and revised estimates for total revenue receipts. However, the Congress, perhaps, has forgotten that the state government’s budget has to be screened at several levels - by the Ministry of Finance, the Planning Commission and even the RBI. Thus, other than over estimating the total revenue collections in the coming fiscal (estimates for revenue receipts), and under provisioning in the budget estimates, the government cannot play around much with these figures.

The attack on the government, spearheaded by former Chief Minister, Capt Amarinder Singh, is based on two things - the SAD government’s claim of a massive jump in its total revenue (over 18 per cent growth) and the difference in the revenue deficit and receipts in the initial budget estimates and the just-released revised estimates.

While contending that the total revenue of the state has increased, Amarinder said that increase in revenue collections has little to do with any government policy.

“However, viewed in the backdrop of inflation, doubling of the MSP and sharp hike in prices of petroleum products, increase in the VAT rate and levy of entry tax, the growth in tax revenue is sub-normal. And even this growth will be more than eaten up by the enhanced interest burden due to the public debt,” he alleged. The fact still remains that the revenue of the state has increased from Rs 9,017.26 crore in 2006-07 to Rs 17,395.74 crore now.

The other allegation is regarding the difference in the revenue deficit in budget estimates (Rs 3787.73 crore) and revised estimates (Rs 5251.36 crore) for 2009-10, and revenue deficit in revised estimates for 2010-11 being projected at Rs 3705.18 crore and at Rs 3378.99 crore in 2011-12. The Opposition has questioned this fall in deficit, which the government claims has also been validated by the Accountant General.

There is always a difference between the budget estimates (based on projections for the coming fiscal), revised estimates (prepared after first three quarters of a financial year, based on the revenue collections till that time) and actuals (presented three months after the financial year is over). This difference is actually a part of every budget as volatility in the markets, inflation or economic slowdown cannot be anticipated.

“However, the revenue receipts have been assumed to grow at nearly 45 per cent as per revised estimates 2010-11 over actual 2009-10, where as the revenue expenditure as per budget estimates of 2011-12 is projected to grow by only less than four per cent. By overestimating the receipts in the revised estimates 2010-11 and under-budgeting the revenue expenditure in budget estimates 2011-12, a crude attempt has been made to show an improved financial position,” says Amarinder.

Regarding the Congress claim that the state’s total debt burden is over Rs 1,25,000 crore, based on the borrowings by PSUs and deferred liabilities, it may be mentioned that, technically, debt by PSUs cannot be included as the debt of the state.