GUWAHATI, March 11?The Finance Minister, Devanand Konwar, today presented a Rs 2600.06 crore deficit Budget for Assam for the year 2002-2003 in the State Assembly with proposals to impose additional tax on component parts and accessories of motor vehicles, motor cycles, three-wheelers, tractors, power tillers etc., and entry tax on eggS, fish, natural flowers among others. He also proposed to exclude hand-made eri, muga, pat and silk fabrics from the purview of the luxury tax. According to the Budget, only 18 per cent of the total expenditure will be on development. According to the Budget estimates for the year 2002-2003, the total expenditure of the State for the year will be Rs 15588.55 crore against total receipts of Rs 14502.52 crore, leaving a deficit of Rs 1006.03 crore. As the opening balance for the year will be a deficit of Rs 1594.03 crore, the year is estimated to end at a deficit of Rs 2600.06 crore.
Konwar said that the increase in overall deficit is primarily on account of the large opening deficit for the year 2002-2003. He said that keeping in view the disappointing award of the Eleventh Finance Commission, the State Government has been pressing the Government of India to provide relief to the State by granting a moratorium on repayment of Central loans for 10 years and by providing a one-time special grant of Rs 1,000 crore. He also said that the State Government has taken up measures for broadening the existing tax base, better tax compliance, prevention of leakages and orientation of the administration for tax revenue collection.
Tax proposals: Konwar expressed the hope that the new tax proposals given in the Budget would mobilise additional tax revenue of Rs 196 crore for the year 2002-2003. He said that as per uniform floor rates of tax, potable liquor is to be taxed at the rate of 20 per cent. Accordingly, sales tax at the rate of 20 per cent has been levied on potable liquor with effect from February 19 this year, and this is likely to fetch an additional revenue of Rs 30 crore per year. The Finance Minister proposed to increase the rate of tax on component parts and accessories of motor vehicles, motor cycles, scooters, three-wheelers, tractors, power tillers-bulldozers and trailers and on chemicals from eight per cent to 12 per cent. This measure is expected to generate an additional annual revenue of Rs five crore, he added. The Finance Minister also proposed to bring items like betel leaves, audio cassettes in regional languages of Assam, sago and barley to the exempted category.
Konwar said that the implementation of the Assam Entry Tax Act would check trade diversion and an amount of Rs 13 crore is expected from this measure. He said that a Bill for amendment of the Act for inclusion of a few more items like cranes, dumpers, three-wheelers and road rollers will be introduced in the current session of the Assembly. The Finance Minister proposed to withdraw sales tax on eggs and impose entry tax on the item at the same rate of eight per cent. He also proposed to impose entry tax at the rate of eight per cent on a few more items like fish, natural flowers and UHT milk.
Konwar said that the ceiling under the Assam professions, Trades, Callings and Employments Taxation Act 1947 was raised from Rs 2250 per annum by an amendment of the Act in the last Budget session of the Assembly and the enhanced rates would come into force from April 1 this year, which would bring an additional amount of Rs five crore per year. Levy of Luxury Tax on certain additional items like all types of tobacco, gutka, other tobacco mixed pan masala, handmade and mill-made silk fabrics including silk saris, woolen and terry-wool suitings has been made effective from February 19 this year and this is likely to fetch an additional amount of Rs 1.50 crore annually. However, the Finance Minister proposed to exclude items like handmade eri, muga and pat silk fabrics including saris and mekhela chadars from the purview of the Luxury Tax. He also proposed to include bidi and edible oils including vegetable ghee manufactured outside the country under the purview of the luxury tax.
Expenditure: As per the Budget estimates, 54 per cent of the total expenditure from the consolidated fund for the year will be on salaries, wages and pension and 23 per cent on debt servicing, leaving only 18 per cent for development. The expenditure on salaries, wages and pension has been increasing over the years and as per the estimate, an amount of Rs 4913 crore would be required for the same in the ensuing financial year. Of the estimated outflows from the consolidated fund for the year 2002-2003, Rs 3674 crore will be on Education, Sports and Culture, Rs 127 crore in Power, Rs 325 crore on Irrigation and Flood Control, Rs 225 crore on Crop husbandry, Rs 158 crore on Industries and Minerals, Rs 166 crore on Social Welfare, Rs 449 crore on Health and Family Welfare, Rs 518 crore on Roads and Bridges and Transport, Rs 785 crore on Police, Rs 3050 crore on Ways and Means Advance Repayment and Rs 2065 crore on Debt Servicing.
Financial position: Giving a grim picture of the financial position of the State, Konwar, in his Budget speech, said that the inability of the State Government to generate resources to meet its expenditure is the main reason for the present position. He said that the committee on fiscal reforms, headed by former Chief Secretary H N Das has already submitted its report, while, the Government has also engaged the National Institute of Public Finance and Policy to undertake a study on the prevailing fiscal scenario and to recommend time-bound programme to restore fiscal health. The State Government will make use of the reports of the fiscal reforms committee and the national institute while finalising its blue print for fiscal reforms.
Debt: Konwar revealed that the outstanding debt of the Government of Assam was Rs 10013.13 crore as on April, 2001. The loans outstanding to the Central Government was Rs 5284.48 crore, which constituted 53 per cent of the total loans, while market borrowings constituted 23 per cent. The estimated outstanding debt as on April, 2002, is projected to increase to Rs 11351.39 crore.
State plan: The Finance Minister revealed that the State Government has already formulated its draft 10th Five-year Plan, giving stress on infrastructure including roads, power and communication, agriculture and allied sector, services like IT, tourism and health care, human resource development, and industrial development. The annual plan for 2002-2003 has been fixed at Rs 1750 crore in a meeting between the Deputy Chairman of the Planning Commission and Chief Minister. The approved plan size excludes provision order PMGSY of Rs 75 crore, which will be provided over and above the state plan.