GUWAHATI, March 10 — Chief Minister Tarun Gogoi today presented a Rs 2365.91-crore deficit Budget for Assam for the year 2003-2004 without imposing any fresh tax on items taxable under the Assam General Sales Tax Act. However, he proposed to reduced tax on newsprint and exempt items like indigenous hand made musical instruments, slate and pencil, human blood, khadi and khadi products etc from levy of tax. He also proposed to impose entry tax on dry fish, gamocha, biscuit, processed fruit juice etc to promote local enterprise and industries.
In his Budget speech, the Chief Minister said that the total receipts for the year 2003-2004 will be Rs 16844.70 crore against expenditure of Rs 18523.27 crore, leaving a deficit of Rs 1678.57 crore. With an opening deficit of Rs 687.34 crore, the year 2003-2004 is estimated to close with an overall deficit of Rs 2365.91 crore.
Giving an account of the steps to be taken to reduce the deficit, Gogoi pointed out that the estimated deficit of the year 2003-2004 shows an improvement over the estimated deficit of 2002-2003. He said that the improvement in the revised estimates was achieved due to increase in tax collection, additional market borrowings and increased collection in small savings. The State Government is constantly urging the Centre for relief in view of the disappointing award of the Eleventh Finance Commission by providing one time financial assistance and moratorium on repayment of Central loans for a period of 10 years. He said that the Government aims to generate additional tax revenue through widening and deepening of the tax base and improving tax administration. The decision of the Central Government to increase oil royalty, though not to the desired extent, will fetch considerable revenue, while, the austerity measures adopted by the State Government will effectively curb wasteful expenditure.
Tax proposals: In his Budget speech, Gogoi said that inspite of the tremendous financial crunch faced by the State Government, it was decided that no new tax would be imposed on the items taxable under the Assam General Sales Tax Act. He proposed to reduce tax on paper and newsprint from eight per cent to four per cent to promote print media, while, as Assam is holding the next national games, he proposed to reduce tax on sports goods from eight to four per cent as on incentive to local sportspersons and sports industries. He also proposed to exempt items like glass bangles, kumkum, bindi, alta, sindur etc from the purview of tax. To promote education, he proposed to exempt slate and pencil from levy of tax. The other items proposed to be exempted from levy of tax include human blood, indigenous handmade musical instruments, khadi and khadi products etc.
As a measure to protect and promote local enterprise and industry, the Chief Minister proposed to impose entry tax on dry fish, processed fruit juice, items of bell metal and brass, biscuit etc, while, withdrawing the tax being levied on these items under the AGST Act. “I have also noted with concern that gamocha, the rich tradition of Assam, is today imported from other States much to the disadvantage of the local weavers. In order to give incentive to our local weavers and encourage their traditional craft, the State Government proposes to impose entry tax at the rate of four per cent on gamocha,” he added.
Gogoi said that a consensus was arrived at on introduction of Value Added Tax (VAT) on all States and Union Territories from April 1, 2003. The State Government has submitted a draft Bill — The Assam Value Added Sales Tax Bill, 2003 to the Government of India for its approval and the Bill will be introduced in the Assembly for consideration immediately after receiving the approval of the Centre. He admitted that there is possibility of fall of revenue in the initial years of introduction of VAT due to lack of experience of department officials. However, he said that the Central Government has agreed to compensate hundred per cent of such fall in revenue in the first year, 75 per cent in the second year and 50 per cent in the third year.
Gogoi also revealed that revenue collection in the State increased in the last couple of years. He said that the Finance (Taxation) Department collected Rs 1270.33 crore against the target of Rs 1280.89 crore in 2001-2002 with an achievement of 99.18 per cent, registering an increase of 11.60 per cent over the collection of 2000-2001. The target for the current financial year has been fixed at Rs 1500 crore and the provisional collection upto January, 2003 was Rs 1086.73 crore. The collection during the same period in the previous year was Rs 928.10 crore.
The percentage share of major items of expenditure from the consolidated funds for the year 2003-2004 include, 36 per cent on salaries, wages and pension, 34 per cent on debt serving, 20 per cent on developmental expenditure, three per cent on non-development expenditure and seven per cent on other administrative expenses. In fact, in the last few years, the expenditure on salaries, wages and pension increased manifold in the last decade. It was Rs 1412 crore in 1993-94 and in the coming financial year, an amount of Rs 59.3 crore would be required for payment of salary, wages and pension. Giving an estimate of the outflows from the consolidated fund in the coming financial year, Gogoi said that Rs 3050 crore would be required for repayment of ways and means advances, while Rs 2541 crore would be needed for debt servicing. The other major heads of expenditure include Rs 108 core for power, Rs 365 crore for irrigation and flood control, Rs 189 crore on crop husbandry , Rs 162 crore on industries and minerals, Rs 149 crore on social welfare, Rs 508 crore on health and family welfare, Rs 547 crore on roads, bridges and transport, Rs 869 crore on police and Rs 3328 crore on education, sports and culture. The estimated inflows into the consolidated fund include Rs 2030 crore on Sales Tax, Rs 994 crore non tax revenue, Rs 1982 core as share of Central taxes, Rs 2050 crore as State Plan grants, Rs 298 crore as non-plan grant from the Centre, Rs 2129 crore as grants from the Centre (CSS), Rs 1087 crore as loans from the Centre and Rs 3879 crore as other capital receipts.
Debt burden: The increasing debt burden has become a cause of serious concern for the State Government. Gogoi said that the outstanding debt of the State as on April 1, 2003 is projected to increase to Rs 13221.71 crore. During the current year, the total debt servicing liabilities as per Budget estimates is Rs 2070.53 crore, out of which Rs 1340.49 crore is on account of interest payment only. Gogoi admitted that the State had to resort to increased borrowing to finance its revenue deficits and to fund its plan expenditures. As on April 1, 2002, the loans outstanding to Central Government constituted 47.25 per cent of the total outstanding loans, while, the market borrowings amounted to 23.86 per cent.
Gogoi revealed that the annual plan of Assam for the year 2002-2003 was originally approved by the Planning Commission at Rs 1750 crore, which was subsequently increased to Rs 1760 crore. The annual plan outlay for Hill areas was fixed at Rs 146.35 crore, leaving a balance of Rs 1613.65 crore for general areas. As the size of the annual plan for the year 2003-2004 is yet to be finalised, the plan size has been tentatively pegged at Rs 1314.78 crore for the State’s general areas to facilitate preparation of the Budget, he added.
In his Budget speech, Gogoi gave a detailed account of the plans and programmes of the Government departments and revealed that a task force headed by the Chief Secretary would be constituted soon to give a thrust to employment generation as unemployment has become a major problem for Assam having more than 15 lakh registered unemployed youths.