Prafulla presents Annual State Budget

The Staesman, June 12, 2009

Statesman News Service
BHUBANESWAR, 11 JUNE: The state opted to slip back to high revenue deficit regime after a gap of four years in order to continue servicing some of the welfare and populist schemes without imposing any new tax.
The Annual Budget of Rs 32,797.55 crore for the year 2009-10 presented by finance minister Mr Prafulla Chandra Ghadei in the Assembly today showed a revenue deficit of Rs 2369 crore and a fiscal deficit of over Rs 6000 crore.
Though affected by the burden of additional salary and pension recommended the the sixth Pay Commission and economic slowdown, allocations for schemes such as the Rs 2 per kg rice, Mo Kudia, Biju KBK, Gopabandhu Gramin Yojana, Madhu Babu Pension yojana were made without taxing the people.
Again while indicating expenditure rationalisation and a drop in revenue receipts because of the recession, the budget did not outline areas where expenses should be curtailed.
It indicated that the government, in all likelihood, will resort to loan from various sources and will also draw from the sinking fund given by the Reserve Bank of India to overcome the situation.
The allocation of Rs 847 crore for the two rupee rice scheme has been introduced in the budget. Expectations are that the burden may be offset to a certain extent as and when the Centre implements its electoral promise of providing three rupees a kilo rice to BPL families.
Barring a new insurance scheme for BPL card holders for which allotment of Rs 10 lakh was made and setting up of a agriculture college in Kalahandi, there were no major new schemes. The coverage of several welfare and pension schemes have been extended.
Talking to reporters , Mr Ghadei conceded that loans worth Rs 4463 crore has been taken into the estimates. He also admitted that since 2005 the state had turned around to be a revenue surplus state and had returned to the revenue deficit position.
Mr Ghadei however pointed out that there was a 8.21 per cent growth in VAT collections and apprehensions of the impact of economic recession were yet to be put in real terms. “Presently we have not imposed any cut in expenditure, “he said, while adding that the planned cut usual comes about at the end of the year.
Apparently, mopping up resources for the Annual Plan of Rs 9,500 crore is going to be difficult. The finance minister said allocations to agriculture, irrigation, education and health had been increased substantially.
In his budget speech, Mr Ghadei had categorically stated “there is already a decline in collection of state’s own tax, non-tax and share in central taxes from the beginning of the financial year. In order to arrest this , it is indispensable to take strong steps for generation of more revenue as well as curtail unnecessary expenditure”.
Laying emphasis on agriculture and irrigation, Mr Ghadei said Jeebika a programme to extend livelihood through watershed projects in six tribal districts has been provided Rs 90 crore while Rs 120 crore has been given for the Rashtriya Krishi Vikash Yojana and Rs 44 crore has been directed towards fertiliser, seed, implements subsidy to farmers.
The interest rate of co-operative banks on crop loan has been reduced from seven to five per cent, for which another Rs 40 crore has been included in the budget.
The AIBP, (irrigation programme), has been given Rs 1,153 crore, he said. The dwelling house scheme Mo Kudi has an allocation of Rs 60 crore while Rs 110 crore has been given for the Gopabandhu Gramina Yojana and Rs 100 crore towards state share for NREGS.

In order to provide employment to youth Rs 10 crore has been allotted to the State Employment Mission.

With regards to police-related expenditure , particularly measures to combat Maoist attacks, the Minister said 2,100 tribal youth had been recruited as special officers in Naxal affected districts and Rs 9 crore had been provided for the purpose. For the establishment of the 4th and 5th India Reserve Battalions Rs 10 crore has been given.

A sum of Rs 50 crore has been provided for financial assistance to one lakh eligible women and a special provision of Rs 10 crore has been made for disabled persons.