Imphal, June 10 2009: The raising of a new IRB women battalion would give an impact to the Manipur government's target of achieving reduction of fiscal deficit by 2008-09, officials of the state finance department commented.

Manipur government has decided to raise one Indian reserved Battalion (Mahila) with 75% reimbursement of the standard cost of raising the battalion (Rs 13.3875 crore out of Rs 17.85 crore for each battalion).

The reimbursement of standard cost of raising and capital infrastructure costs is to be done in the form of grant-in-aid from the funds allotted under the Security Related Expenditure Scheme of Union ministry of home affairs (MHA).

The ministry will also reimburse Rs 6 crores for providing arms and communication equipments and specialized equipments for raising of two commando companies of the same battalion.

For setting up the women IRB, state Cabinet convened under the chair of the chief minister, O Ibobi Singh has approved to the creation of 1007 posts of different ranks in the state police department.

Police department work out the annual financial implication at Rs 20.59 crore including Rs 12.85 crore for recurring expenditure and Rs 7.73 crore for non-recurring expenditure.

The work out expenditure will give impact to the Financial Resource Budget Management (FRBM) Act enforced in the state by the government with a set target of achieving reduction target of fiscal deficit by 2008-09 which government is considering for amendment to reset the date of achieving the target by 2009-10 .

The FRBM target mainly emphasizes on achieving reduction in fiscal deficit to 3% of GSDP n 2008-09.The actual position for 2008-09 is being ascertained within one month or so and if the target is not achieved, the Act will be amended, on the instruction of the government of India to refine the target of reduction in fiscal deficit to 3.5 percent of GSDP by 2009-10 .

For raising the new IRB, as per the terms, 75% of the initial cost, that is, about 13.38 crores will be borne by the Central government.

The balance of 25%, that is, 4.47 crores will be meted out of the state resources.

The net impact will be to the extend of Rs.4.47 crores in 2009-10 provided the state government keeps the cost of raising limited to Rs 17.65 crores per battalion and provided Centre reimburses the cost incurred in time.

Since the cost of raising the new battalion will be borne partly by the Central government for the initial year, it will have marginal impact on the FRBM act in 2009-10 .

However, the official of the state finance department observed that from the second year of raising the new battalion, the state government would feel the impact.

The 13th Finance Commission's recommendation will be in force at that time and the state government would be able to bear the expenditure.

Otherwise, there will be a consequential burden on state's resources that may adversely impact the ways and means of the situation, the finance department observed.

Comment