FM to present budget today amid rising debt, revenue expenditure, power bill

FM to present budget today amid rising debt, revenue expenditure, power bill

4 March 2012
The Daily Excelsior
Sanjeev Pargal

Jammu: Amidst rising debts, increasing revenue expenditure, few resources of mobilization for increasing tax base of the State, ever rising expenditure on purchase of electricity and mounting dependence on the Centre, Finance Minister Abdul Rahim Rather will present his 12th budget, fourth in a row, in the Legislative Assembly at 11 am tomorrow. This will be fourth general budget of National Conference-Congress coalition Government, headed by Chief Minister Omar Abdullah. Total budget of the State was expected to be around ' 35,000 crore, official sources said. Annual plan for the year 2012-13 has been estimated at ' 7300 crore, about 10 per cent hike over current year's plan of ' 6600 crore. The plan could even go up to ' 7500 crore. However, the Prime Minister's Re-construction Plan (PMRP) was expected to come down from current year's ' 1200 crore to somewhere around ' 800 crore, mainly due to completion or near completion of some of the ongoing schemes under the Plan. Sources said the Government was finding it difficult to reduce ever increasing revenue expenditure and electricity purchase bill, which were eating into development projects of the State. The power purchase bill was expected to stay around ' 3000 crore as against revenue of Rs 1200 crore or ' 1300 crore. The Government had revised revenue target from electricity to ' 1615 crore from ' 1400 crore for the current financial year but the target was unlikely to be met. The revenue expenditure, which included expenses of the Government including Ministers, was also increasing. However, the Government has attributed increase in revenue expenditure to rising bill of salary and pension of the Government employees, which had increased manifold and gone up to ' 13,500 crore for current financial year mainly due to implementation of Sixth Pay Commission recommendations. According to sources, presentation of a zero deficit budget has almost become a necessity for the Finance Ministers now due to guidelines of the Union Finance Ministry and the Planning Commission of India to match expenditure with available resources. However, ' 31,272 crore worth Central debt on the State Government would definitely put a question mark on zero deficit budget. According to estimates, the Central debt was expected to slightly increase during current financial year instead of coming down. As far as Additional Resources Mobilisation (ARMs) were concerned, sources said there was no option left but to slightly increase them to reduce dependence on the Central Government. However, the State's share from Central taxes has increased in the current financial year. Similarly, Commercial Taxes, Valued Added Tax (VAT), Service Tax, Excise Tax etc have all shown a steady increase in the year 2011-12 and the Finance Minister would increase their targets for next financial year in the general budget. To keep over four lakh strong work force of the Government employees, Mr Rather was expected to keep budgetary provision of two Dearness Allowance (DA) installments and arrear installment for implementation of Sixth Pay Commission recommendations for the upcoming financial year. The Government had promised to clear arrears of Government employees on account of implementation of Sixth Pay Commission recommendations in five equal installments spread over five years. All five installments would be credited into the GPF account of the employees. While the Government has cleared first installment of the Pay Commission arrears (20 per cent of total payments) during current financial year, the second installment of 20 per cent would be cleared during 2012-13 with the budgetary provision. The Government has also kept budgetary provision for payments under Sher-I-Kashmir Employment and Welfare Programme for Youth (SKEWPY). The Government would also be staking claim for about ' 35,000 under 12th five year plan, beginning April 1, 2012. The 11th five year plan is ending on March 31 this year, sources said. The meetings for finalisation of annual plan of the State for 2012-13 and 12th five year plan were expected to be held in April this year, sources said, adding that the amount in both the plans would be finalized somewhere in June or July. This is for the first time that Mr Rather would be presenting the annual budget based on plan figures conveyed telephonically by the Planning Commission officials to State officials of Planning and Finance Departments as no meeting of State bureaucrats could be held with the Planning Commission after just one round on December 15 last year. Mr Rather will be presenting his 12th budget tomorrow. He had presented budget in 1983, 1984, 1987, 1988 1989, 2000, 2001, 2002, 2009, 2010 and 2011. Besides, he has also presented two Vote on Accounts.