CM Ibobi presents state budget 2011-12
VAT rate, power consumption charge hike to manage fiscal deficit
Source: Hueiyen News Service

Imphal, March 14 2011: Chief Minister, O Ibobi Singh who is also looking after the Finance Department today presented a ' 6886 crore state Budget estimate for 2011-12 in the state Assembly, which proposed a hike in VAT and Power receipts for recouping state fiscal deficit.

Proposing the total expenditure of ' 6886 crore out of the consolidated fund of the state, the Chief Minister highlighted the likely fiscal position during the ensuing fiscal year.

Revenue account is estimated to be in surplus for the eight consecutive years, he said adding that the fiscal deficit is estimated at ' 839 crore.

This is 7.87% of the GSDP, the CM said asserting that the total outstanding fiscal liability is projected at 66 percent of the GSDP during 2011-12 .

Government estimates the total receipts to be ' 7022 crore during the fiscal year 2011-12, which is an increase of 8 % over the 2010-11 (revised estimate) of ' 6493 crore, he said asserting that government is estimating a revenue receipts of ' 5882 crore and capital receipts of ' 1140 crore the during the year.

The total expenditure of ' 6886 crore out of the consolidated fund of the state indicated an increase of 5 % over 2010-11 (RE) of ' 6546 crore, he said that out of this, ' 3277 crore is under non-plan, ' 3290 crore under state plan and ' 319 crore under centrally sponsored schemes (CSS), central plan schemes (CPS) and NEC schemes.

The provision in respect of the CSS, CPS and NEC schemes, are subject to change according to actual releases during the course of the year, he added.

He further said that out of the total expenditure, an amount of ' 544 crore is charged as expenditure and the remaining amount of ' 6342 crore is voted expenditure.

The total revenue expenditure is estimated at ' 4763 crore while Capital Expenditure is estimated at ' 2123 crore.

Presenting his last Budget of the second consecutive five-year term of the SPF government in the State Assembly here, Ibobi also laid down the challenges before the government on the fiscal management front which according to him is a daunting challenge.

While, the resources are limited, the state government has huge expenditure liabilities to discharge.

The situation assumes more significance in the light of growing reluctance on the part of the government of India to meet the fiscal gap, particularly on the non-plan side, through additional transfers, he said.

Keeping in view the imperative of raising more resources to reduce the fiscal gap, the state government has already taken additional resources mobilization measures.

Rate of VAT has been enhanced by one percent.

Rates of goods tax and passenger tax, excise duties and forest royalties, which are more than a decade old, have also been revised, he said.

Necessary formalities for notification of new rates of power tariffs, motor vehicles tax, irrigation and water are being completed and would be notified soon.

A serious and concerted effort is being made by the government to collect outstanding power dues which are almost touching ' 300 crore, the Chief Minister said.

"With these measures, collection from state's own tax and non-tax revenue is expected to improve considerably during the ensuing fiscal, 2011-12," he said the House informing that the scheme of financing for annual plan 2011-12 was finalized in consultation with the Planning Commission of India.

The commission fixed stiff revenue targets for the state government including additional resources mobilization target of ' 200 crore, he added.

Total estimates of state's own tax and non-tax receipts assumed in the budget estimates are ' 318 crore and ' 460 crore respectively.

These estimates have been framed keeping in view the additional resource mobilization measures being taken up by the government, which will be implemented during the course of the year, he said.

Proposing the major increase in VAT and power receipts, he said that the state's share in Central taxes and duties has been estimated at ' 1190 crore during 2011-12.He also estimated the non-plan grants from the Centre at ' 1306 and plan grants including CSS/CPS at ' 2609 crore.

Giving a detail of the plan outlay, he said that the state plan will be financed to the extent of 77% by the Central Plan Assistance and Special Plan Assistance.

Normal Central Assistance has been fixed at ' 758 crore.

A sum of ' 800 crore is for taking up important and priority projects in the state under SPA and ' 530 crore has been earmarked for implementing specific schemes under Additional Central Assistance.

The rest will be financed by way of assistance under Externally Assisted Projects, Open Market Borrowings, Negotiated Loans, Small Saving and balances for the public account, CM said.

Observing that strengthening the basic infrastructures in the state is critical for sustaining the present growth momentum, the CM said that ' 1980 crore has been included in the budget outlay for accelerating various infrastructure development projects.

The fixed amount is 19% of the GSDP, he added.

He also mentioned some of the broad details of the work, schemes and projects proposed to be taken up under the annual plan and said that special provisions have been made for addressing gaps in critical infrastructure.

Out of ' 800 crore under SPA ' 201 crore has been earmarked for upgradation of various roads and bridges in both hill and valley districts.

Other earmarked amounts, according to the CM includes, ' 145 crore for infrastructural development of JNIMS, ' 80 crore for conservation and management of Loktak lake and associated wetlands, ' 54 crore for Sewerage Project phase-I for Imphal city, ' 46 crore for flood control and anti-erosion schemes, ' 28 crore for completion of ongoing works of APDRP in greater Imphal areas, ' 25 crore for improving basic health infrastructures in the valley area and ' 3 crore for setting up a special school for the physically challenged children with learning difficulties.

Considering the importance of agriculture in the state economy, CM also proposed ' 139 crore for development of this sector.

The earmarked amount is a 49% increase from the earmarked amount of 2010-11 which was ' 93 crore, CM said.

Another amount of ' 326 crore has been earmarked for the improvement of irrigation which is closely related with development of agriculture.

Adequate allocation has been made for completing ongoing projects of Thoubal and Dolaithabi projects, CM Ibobi went on to say.

As per the CM's disclosure, government has provided ' 79 crore for augmentation of road connectivity, ' 50 crore for road widening and repairing of roads, ' 29 crore for infrastructural development of border and tribal areas under Special Area Development Programme.

Further, ' 135 crore has been allocated to the power sector, out of which ' 15 crore for pre-paid metering in Imphal areas and ' 10 crore as state equity share for the Loktak down stream project.

The pre-paid metering system is expected to sustaintially curb power theft and ensuring metering based on actual usage of energy, he said.

Other earmarked amount includes ' 161 crore for the social sector, education, sports, arts and culture, ' 124 crore for water supply sector, ' 134 crore for urban development, ' 52 crore for ST, SC and MOBC schemes, ' 107 crore for strengthening Autonomous District Councils in hill districts, ' 30 crore for khadi and village industries development.

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