Imphal, June 11 2009: With government apprehension of unability in achieving the target of reduction of fiscal deficit of the state to 3% GSDP in 2008-09, authority of the Manipur government is considering for the resetting the date of achieving the target making amendment to the Fiscal Responsibility and Budget Management Act (FRBM Act) which was enacted in the state six years back in 2003 .

The government of Manipur enacted the FRBM Act in 2003.It targets mainly in emphasizing on achieving reduction in fiscal deficit to 3% of Gross State Domestic Product (GSDP) in 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% of GSDP by 2009-10, an official of the state finance department said.

The adverse fiscal position continues to plague the State for the last many years.

The year 2001-02 ended with a negative balance of Rs.557.68 crores.

During 2002-03, Central government had helped the State with a medium term fiscal loan of Rs.371 crores and yet the year 2002-03 ended with a negative balance of Rs.367.70 crores.

A request to Central government for similar help of a loan during this financial year did not materialize and so there has been some apprehension that closing deficit in 2003-04 financial year will be to the tune of Rs.580.27 crores, according to the source.

The insurgency problem continues to have an adverse impact on the security environment in the State.

Though the government has been able to contain the insurgency problem to a great extent and maintain law and order, the overall situation is still not yet conducive for accelerated economic activities, the source added.

The source further stated that the strategy for economic development now heavily depends on private sector initiative and investment.

Unfortunately, due to law and order situation in Manipur, the atmosphere is not perceived to be investor friendly, thus depriving the State of the opportunities of investment, employment, generation of income, etc.

At the core of our economic endeavor and management of the State's finances are the interests of our citizens.

The priority towards achieving this is the restoration of the macroeconomic stability as well as to make funds available for developmental purposes.

However, this goal cannot be achieved by the efforts only of the State government, the source said.

The State's own tax and non-tax revenue sources represent only 7% to 12% of the consolidated fund.

Even substantial increase in this area cannot make any appreciable dent in the huge gap existing between receipts and the expenditure.

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