Himachal CM presents populist but deficit budget

Posted on 19th Mar 2015 by mohit kumar

Shimla, March 18 (IANS) Himachal Pradesh Chief Minister Virbhadra Singh presented a populist but deficit budget of Rs.28,339 crore for 2015-16 with no new taxes on Wednesday.

Presenting his 18th budget spread over his record six chief ministerial tenures in the state, Virbhadra Singh tried to woo industrial houses.

He announced that new industries would be charged entry tax at the rate of one percent on industrial inputs instead of the existing two percent.

The chief minister, in his over three-hour-long speech also announced that electricity duty for specified extra high-tension category consumers would be reduced from the existing 15 percent to 13 percent.

Further, electricity duty for existing medium and large industries, except extra high-tension category, will be reduced from 13 percent to 11 percent.

For the existing small industries, it will reduce from seven percent to five percent and any new small industries will pay only one percent electricity duty for five years.

To conserve electricity, the chief minister announced the government will give away three LED bulbs at a subsidised rate of Rs.150 to 21 lakh households in the state. The cost of a bulb would be recovered in installments of Rs.10 per bulb per month.

He also proposed to reduce the value-added tax (VAT) on these bulbs from 13.75 percent to 5 percent.

The chief minister announced reduction of VAT on fabrication of bodies of trucks and buses from 13.75 percent to 5 percent.

"The exporters making purchases of industrial inputs within the state for export purpose will be provided the facility to purchase goods tax free within the state on the submission of requisite form."

To promote off-season vegetable production which is annually generating a revenue of Rs.2,500 crore, the chief minister proposed to launch 'Establishment of Centres of Excellence for Vegetable Nursery Production' scheme.

It will raise seedlings of vegetables, flowers and other valuable plants under controlled environment.

In horticulture, 1,000 hectares of additional area will be brought under revamped apple rejuvenation project.

A total of 10,000 students who top classes 10 and 12 will be provided with netbooks.

According to budget estimates, the total revenue receipts are estimated at Rs.23,535 crore and the total revenue expenditure is estimated to be Rs.23,488 crore with a revenue surplus of Rs.47 crore.

The expected receipts in the capital account of the government are Rs.3,904 crore apart from Rs.900 crore in public account and provident fund.

The capital expenditure, including loan repayments is estimated to be Rs.4,851 crore. Fiscal deficit for 2015-16 is likely to be Rs.3,285 crore.

Thus, as per the budget estimates, against an expenditure of every Rs.100, the state will have Rs.83.11 as the total receipts, including transfers from the central government, excluding loans.

The gap of Rs.16.89, he said, will be met by borrowings.

Out of every Rs.100 of state revenue receipts, Rs.26.94 will accrue from own tax revenues, Rs.6.41 from non-tax revenues, Rs.16.33 from share in central taxes and Rs.50.32 from central grants.

Out of every Rs.100 spent, the salaries will account for Rs.29.23, pensions for Rs.14.26, interest payments for Rs.10.41, loan repayments for Rs.5.30, and the remaining Rs.40.80 will be spent on developmental works.

"This is a growth-oriented budget and I have tried to allocate funds to each department. The priority is given to education, roads, irrigation and public health and agriculture," he told reporters.

On being asked the difference between his first budget and the 18th, he said: "This is my longest budget speech."

BJP, the opposition party described the budget directionless.

"It's totally directionless. Sixty percent funds in the budget are grants from the central government," Leader of Opposition and two-time chief minister Prem Kumar Dhumal told reporters.