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Rio presents deficit budget; total deficit for 2010-11 at rs.603.64 cr
Correspondent KOHIMA, JUL 22 (NPN):
Published on 23 Jul. 2010 12:17 AM IST
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State chief minister Neiphiu Rio Thursday presented a Rs.603.64 crore deficit budget for the year 2010-2011 without proposing any new tax for the current year. He said emphasis would be on augmenting revenue earnings from various sources.
“For our internal revenue collection, I have put the target at Rs.369 crore as against the Budget Estimated of 2009-2010 of Rs 321 Crore. This represents a growth of 15 %” he said.
In his budget speech, Rio said the current year’s transaction was estimated to result in a negative balance of Rs. 5.94 crore.
However, because of the estimated negative opening balance of Rs. 597.70 crore, the year 2010-2011 was estimated to close with a negative balance of Rs.603.64 crore.
Rio, who also holds the finance portfolio, said budget proposals were estimated at gross receipt at Rs.6416.39 crore and the gross expenditure at Rs.6434.83 crore (See in Box).
Rio expressed concern that as the state approached the fifth decade of statehood, the government’s own resources could barely meet the salary expenditure even for two months despite the fact that over the last ten years, the state‘s own revenue has grown from Rs.88.70 crore during 2000-2001 to Rs. 321 crore in 2009-10.
Rio said he held a series of meetings with revenue collecting department to examine the loopholes in the existing system so as to take corrective measure and also explore all possible options for mobilizing additional revenue for the state’s exchequer. He said the cabinet had formally approved the measures suggested for improvement of revenue performance. He said there would be strict monitoring of deduction and deposit of tax by various departments.
He said the plan outlay of Rs.1500 crore was finalized with the Planning Commission in consultation with the Ministry of Finance, after absorbing negative Balance of current revenue of Rs.781.89 crore, which included salary shortfall of Rs. 712 crore. He said the Centre has made this possible by substantially hiking the Special Plan Assistance in addition to introducing a new window name “Special Assistance” which is united to specific projects. Had it not been for this shortfall of Rs.712 crore on account of salary, the plan size for 2010-2011 could have been much higher he stated.
He said though the government had to sacrifice a larger plan size he was glad that not only the salary expenditure but the 6th ROP earlier effected from June 1,2008 to April 1,2010 was subsequently offered to the employees as a gesture of good will.
He also said the government decided to give one month’s salary arrears in addition that would also benefit those who retired during the last two years. Giving retrospective notional effect cost about Rs. 80 crore while one month’s salary arrear will cost Rs. 43 crore, he added.
Rio also said that the salary expenditure hovers 65 % of the total revenue expenditure net of interest and pension as against norms of 35 % adopted by the 13th Finance Commission (FC) and regretted that the 13th FC chose to overlook special category states like Nagaland, by applying the same norms with general category states.
He said the state wrote to the 13th Finance Commission on July 2008 even before the 6th Central Pay Commission’s report was implemented by the centre seeking advice on the manner in which additional requirement of funds for salary should be projected.
Rio said his government knocked on the doors of the prime minister, finance minister , planning commission and 13th finance commission on several occasions to consider the state’s financial obligations. He said despite the 13th finance commission not granting any assistance, the state government stood firm and could deliver with help from the Central government.
The chief minister also said the government was prepared to extend assistance to banks for setting up branches within 19 blocks that are unbanked in order to encourage economic growth. Rio said on the state government’s requests, the RBI has granted clearance in principle, to extend banking coverage to unbanked blocks.
He urged for better recovery of loans in the state otherwise, credit flow would be decreased. In this regard the Rio informed that the government has already framed rules for giving teeth to the banks to enforce recovery of loans.
Friendly budget:Rio
Later addressing the media, Rio described the budget as “people-friendly and youth-friendly” since DAN was a “people’s government”. He said the budget therefore, sought to motivate them to inculcate the work culture of the Naga society.
He also said that the government seek to revamp tax collection and the targeted amount for the current financial year is Rs. 369 crores, which is 15% over the previous year.
He said the government will reward departments that achieve or exceed targets while punishing those failing to achieve targets. He said the budget emphases was on the social sectors like Agri, Education, PHE, Roads, Horticulture, in order to improve living standards of the people.
He also said that a cabinet has decided to make Tribal Hohos take part in the DPDB meeting as they should be involved in the planning and development process.
The Broad item- wise statement of the estimated gross receipts and gross expenditure are as under:
A. RECEIPTS (Rs. In crore)
(i) State’s own tax and non-tax revenue 369.46
(ii) State’s share of Central taxes 657.10.34
(iii) Central assistance (grants and loan) 4335.81
(iv) Internal debt (including market loans, Institutional loans and W&M advance from RBI) 1050.02
(v) Recovery of loans & advances by State Govt 4.00
Total 6416.39
B. EXPENDITURE (Rs. In crore)
(i) Non-Plan expenditure (excluding servicing of debt) 2868.66
(ii) Servicing of debt (including W&M advance from R.B.I.) 1218.27
(iii) State Plan expenditure - 1500.00
(iv) Expenditure on schemes sponsored by Ministry of DONER 172.18
(v) CSS and NEC sponsored schemes 675.72
Total 6434.83
C. PUBLIC ACCOUNT (Net) (+) 12.50
D. Net Current transaction (A-B+C) (-) 5.94

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