Imphal, July 07 2010: Chief Minister O Ibobi, who also holds the finance portfolio, today presented in the Manipur Legislative Assembly the full budget of Rs 282 crore fiscal deficit of Rs 5965.24 crore for the year 2010-11 underscoring the need of taking up all necessary measures to maintain fiscal equilibrium expected to experience in the year to come, mostly importantly by implementation of six pay bands of the Central government.

The budget also calls for making all effort to utilize the scarce resource of the state carefully and mobilizing additional tax and nontax revenues on state's own.

Presenting the budget estimate on the first day of the session of the Manipur Assembly, Chief Minister O Ibobi Singh expected imbalance in the non-plan account which would have a cascading effect on the state's finance and jeopardize growth and development.

The implementation of 6th Pay Commission recommendation to its employees and the unavoidable need for creation and filling up of a large number of posts and vacant posts in the key departments like police, health, education and district councils is another burden which will compel government to the increase expenditures from the non-plan side during the current year and beyond, the chief minister estimated.

Additional financial liabilities on account of pay revision, creation/filling up of posts etc.

is estimated at Rs 850 crore during the current year, Ibobi said adding that it is indeed a serious challenges lie ahead of the government on the fiscal management front in the sort and medium term.

The substantial increase in the non-plan expenditure on account of pay and pension revision and new recruitments in the key departments and the consequent pressures which could exert on the non-plan account of the state are a matter of serious for his government, he asserted.

"We have had such unpleasant experiences during the period from 2000-2004 when even the monthly salaries of government employees could not be disbursed for months and the state was in the midst of a severe ways and means crisis,' Ibobi recalled observing the imperative needs for taking up all necessary measures to maintain fiscal equilibrium.

This expected fiscal equilibrium could only be achieved by pruning wasteful and in-fructuous expenditures and raising more of state's own tax and non-tax resources, he asserted reminding that "the management of finances of a fiscally weak state like Manipur is a challenging task".

The state's own revenue receipts comprise 9 percent of the total revenue receipts while the rest comes through Central transfers in the form of grant-in-aid and state's share in Central Taxes.

On the non-plan revenue account, the state's contribution is only 25 percent out of state's total non-plan revenue receipts, he said.

Manipur government has huge expenditure liabilities to discharge on the revenue account, more specifically on the non-plan revenue account, on the other hand, he said observing that on the average over 75 percent of the state's non-plan revenue receipts are necessity marked for meeting commitments towards salary, pensions and interest payments.

Government incurred 50 percent of the revenue receipts in the payment of salary alone while the resources of the state are few and limited.

There are huge expenditure liabilities which are mostly recurring and unavoidable in nature, the chief minister said.

Government India is now reluctance to meet state's non-plan gap through additional transfers and shortfall state's resources which id inevitable for the state.

"With growing reluctance on the part of Central government, we have no choice but to make all efforts to utilize our scarce resources carefully, and mobilize additional tax and non-tax revenues on our own," Ibobi put down.

The budget session of the Manipur Assembly, which would have 16 sitting in all, will conclude on July 29.Four government bills will be introduced during the session apart from discussing and passing of the estimate budget 2010-11 .

Mention may be made that Chief Minister had presented an interim budget in a four day session of the Manipur Legislative Assembly concluded on March 11, in which the estimated budged of 2010-11 for four months was passed by the house.

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