GUWAHATI, Jan 17 — The rising trend of revenue expenditure vis-a-vis falling trend of capital expenditure and the rising trend of revenue expenditure out of a total plan expenditure, as revealed by the time series since 1990-91, point to the fact that investment in capital formation have been falling over the years in the State. As a direct consequence of this, economic growth in the State has been stunted and neither wealth nor income nor employment have increased at the required or the expected rates. This is unfortunate, said the Committee on fiscal Reforms (COFR) in its December 7, 2001, report. The annual capital expenditure of the State never rose beyond 20 per cent in the past one decade. It was 22.95 per cent in 1986-87. It fell to a nadir of 9.31 per cent in 1996-97. Since then there has been a slight improvement. But in the context of the present pattern of rising revenue expenditure it would be rather naive to assume that the trend would be maintained. On the other hand, revenue expenditure has risen from 81.68 per cent in 1990-91 to 88.28 per cent in 1999-2000. It had risen to a peak of 90.69 per cent in 1996-97, the report said.
Significantly, the State Government’s own sources of revenue have never been enough to cover the total annual salary, wages and pension bill. As a percentage the total bill on these three items is 234.42 per cent of the State Government’s own sources of revenue as in 2001-2002. Even as a percentage of the State Government’s total revenues from all sources, including devolution of Central revenue and plan assistance, it has been more than 50 per cent ever since 1994-95. In 2001-2002 it increased to 75 per cent. This is too high, said the COFR report. However, during the first five-year period of 1985-86/1989-90 to the third five-year period of 1995-96/1999-2000 the State’s own total resources increased by 283.29 per cent, tax revenues increased by 337.88 per cent, non-tax revenues increased by 205.19 per cent, total receipts from the Centre increased by 367.26 per cent, share of central taxes increased by 369.72 per cent, quantum of grants increased by 365.42 per cent and receipts from the Centre as percentage of total revenue receipts increased from 63.84 per cent to 69.60 per cent. But, in the recent years, non-Plan revenue gap grant under the award of the 11th Finance Commission had been released to the extent of 85 per cent only owing to the State’s failure on the front of fiscal performance to qualify for the remaining 15 per cent. Besides, owing to the State Government’s failure to furnish utilisation certificate for funds released by Centre earlier, the entire fund was not released by the Central Government on account of grants for upgradation and special problems during 1998-99 and 1999-2000.
Similarly, in 2000-01, it has been stated, the Centre has released only 50 per cent of the fund earmarked by Eighth Finance Commission for urban local bodies. The fund earmarked by the Eighth Finance Commission for rural local bodies has not been released at all because of the non-existence of such bodies, said the COFR in its report. It is also seen that the State’s share of income tax fell from Rs 587.84 crore in 1997-98 to Rs 403.62 crore in 1998-99, while going through the figures concerning the transfers of amount from the Central Government on account of State’s share of Central taxes and various grants, the COFR report said. Though it increased to Rs 460.79 crore the following year, it did not reach the level of 1997-98. On the other hand, the share of union excise did not maintain, during 1998-99 and 1999-2000, the annual growth rates of previous years, the report said.