Rs 1316.62-cr deficit Assam Budget tabled

GUWAHATI, February 12: The Chief Minister, Prafulla Kumar Mahanta today presented a rs 1316.62 crore deficit budget for the year 2001-2002 in the State assembly. In the budget, Mahanta, who is also in charge of the finance department, proposed to introduce a film surcharge and to provide relief to the weavers to promote the handloom sector. As per the financial estimates for the year 2001-2002, the total receipts of the State Government for the year would be Rs 11,329.35 crore as against the expenditure of Rs 12,221.90 crore, leaving a deficit of Rs 892.55 crore. As the year will open with an opening deficit of Rs 424.07 crore, the year will end with a deficit of Rs 1,316.62 crore. In his budget speech, Mahanta said that due to prudent fiscal management, the State Government was looking at a much smaller budget deficit than the original budget estimates in the current year. He said that the Government proposed to reduce the deficit in the current financial year by following the fiscal management. The award of the Eleventh Finance Commission was a big disappointment for the State, but the State Government has been urging the Government of India to redress the injustice done to the State, he added. Mahanta said that the Government expected to generate additional tax revenue by widening the tax base and by putting greater stress on better tax administration. "We expect that the Central Government will take due cognizance of our demand for oil royalty hike," he added. He also expressed the hope that the Government would get additional funds from the Central Government as reimbursement of the security related expenditure. Tax proposals: In his budget speech, the Chief Minister proposed to introduce a film surcharge at the rate of 20 per cent of the amusement tax to raise corpus fund to finance production of regional films. The film surcharge is proposed to be levied for a period of five years only. Mahanta revealed that the President of India has recently granted his sanction to the introduction of the Entry Tax Bill in the State Assembly. He said that with the enactment of the Entry Tax Act, an additional revenue of Rs 20 crore would be generated. The implementation of the Act will reduce the scope of avoiding payment of sales tax in respect of goods purchased by persons in Assam, he added. "It is necessary to mention that this does not amount to a new tax, but is only a measure to plug the loopholes in the existing tax arrangement," Mahanta pointed out. The Chief Minister revealed that the introduction of the uniform floor rates of tax would bring additional revenue of Rs 45 crore under the Assam General Sales Tax Act in the current year. However, in spite of the introduction of the uniform floor rates of tax, the State Government kept cotton yarn used in the handloom sector exempted from payment of tax. As acrylic yarn and other synthetic yarns are also used in the handloom sector now-a-days, the Government is considering the inclusion in the hank form in the exempted list to provide incentive to the handloom sector, he added. In order to enhance revenue collection under the Amusement and Betting Tax Act, the Government proposed to allow the proprietors of the cinema halls to determine the rate of admission fees without any Government control. The enhancement of the admission fees will generate additional revenue, and it is expected that an additional revenue of Rs 7 crore would be generated if the State control on admission fees is withdrawn. At present, the show tax under Assam Amusement and Betting Tax Act is levied at the rate of 10 per cent of the total collection of admission fees in a show in a cinema house subject to maximum of Rs 10. The Government now proposed to enhance the ceiling to Rs 100 and the amendment of the Act is expected to fetch an additional revenue of Rs 1 crore, he added. Referring to the decision to introduce the system of value added tax in all the States, Mahanta said that the system would be more transparent. State finances: Giving an overall position of the State's finances, Mahanta said that the continuing imbalance between expenditure and receipts generated severe fiscal stress and created cash flow problems, forcing the State Government to rely heavily on drawals against the ways and means and overdraft facility of the RBI. The growth of the non-plan revenue expenditure can be attributed to factors like mounting expenditure on salaries, wages and pension, increase in expenditure on debt servicing, growing dependence of State public sector undertakings on budgetary support and heavy expenditure in maintenance of law-and-order and counter-insurgency operations. The outstanding debt of the State Government, which stood at Rs 6,704.70 crore on April 1, 1999, increased to Rs 8,441.33 crore on April 1 last year, of which 57 per cent was Central Government loans. However, the only silver lining in the dismal financial scenario is that the Net State Domestic Product (NSDP) recorded an increase. Mahanta revealed that the NSDP for the year 1999-2000 was estimated to the tune of Rs 25,050.96 crore at current prices and Rs 15,554.71 crore at constant (1993-94) price. This represented an impressive increase of 15.99 per cent at current prices and 8.19 per cent at constant prices over the previous year. Demography: In his budget speech, the Chief Minister said that according to the projection of the Registrar General of India, the population of Assam increased to 26.4 million as on October 1, 2000, from 22.4 million in the 1991 Census. Employment: The Chief Minister expressed serious concern over the problem of unemployment, and said that the problem is sought to be tackled by adopting a multi-pronged strategy including fostering economic development, promote private and public investment and restore peace. He said that the number of job seekers, as per the live register of the employment exchanges, declined from 16,24,021 in the end of June 1999 to 16,18,210 in June last year. To reduce the problem, the Government introduced the Chief Minister's Swa Niyojan Yojana to provide self-employment opportunities to the youths. The total financial involvement for the project would be Rs 161.79 crore, of which, the loan component would be Rs 91.43 crore. The Planning Commission has agreed to provide additional Central assistance of Rs 30 crore for the current year in this regard. The Chief Minister also gave an account of the performance of the Government departments in his budget speech.