CM presents Rs 819 crore deficit budget

**Meghalaya chief minister Mukul Sangma presented Rs 819 crore deficit budget for the state for 2015-16 on Wednesday**

SHILLONG, MAR 18: Meghalaya chief minister Mukul Sangma Wednesday tabled Rs 819 crore deficit budget for the state for 2015-16. “I am presenting the 2015-16 budget with a fiscal deficit of about Rs 819 crore which is around 2.8 per cent of the GSDP,” Mukul told the assembly while presenting the budget.

Estimating the total receipts at Rs 9282 crore only as compared to Rs 11,156 crore last year, Sangma said the revenue receipts are estimated at Rs 8403 crore and capital receipts at Rs 879 crore excluding borrowings and other liabilities, the total receipts are estimated at Rs 8434.

Sangma blamed the revenue shortfall to the impact of the National Green Tribunal ban on coal mining reducing the state’s own revenue by Rs 600 crore annually.

In the last financial year, the state’s own tax and non-tax revenue was estimated at Rs 1885 crore, Sangma said for the financial year 2015-16 the projection is Rs 1347 crore.

The total expenditure was estimated at Rs 9583 crore, excluding repayment of loans and other liabilities, of which revenue expenditure is estimated at Rs 7621 crore while capital expenditure at Rs 1962 crore, the chief minister said.

Sangma also added that the interest payment during 2015-16 is estimated at Rs 471 crore and pension payment is at Rs 446 crore.

Stating that the fiscal deficit (2.8 per cent) is anchored within an annual limit of 3 per cent as per 14^th Finance Commission fiscal roadmap, Sangma informed that the state will be eligible for flexibility of 0.25 per cent over and above this for any given year for which the borrowing limits are to be fixed if the debt-GSDP ratio is less than or equal to 25 per cent in the preceding years.

Sangma said, “The state will be further eligible for an ‘additional borrowing limit’ of 0.25 per cent of the GSDP in a given year for which the borrowing limits are fixed if the interest payments are less than or equal to 10 per cent of the revenue receipts in the preceding years.”

Sangma, however, added the finance commission has recommended that the flexibility in availing the additional limit will be available only if there is no revenue deficit in the year in which the borrowing limits are to be fixed immediately in the preceding year.

Sangma stated that the most daunting task in presenting the budget this year is the huge revenue shortfall faced by the state due to the impact of the National Green Tribunal (NGT) ban on coal mining where the state’s own revenue is reduced by around Rs 600 crore annually on account of the ban.

Sangma, nonetheless, assured, “I am exploring all other possible sources to generate additional revenue. These unforeseen challenges will only motivate us to work harder and maintain fiscal, social and economic stability.”

Stating that state received Rs 9842 crore as total transfer during the 13^th Finance Commission, the CM said, “The projected transfer for the 14^th FC period is Rs 27, 270 crore, which is an increase of 177 per cent over the 13^th FC’s award.”

Sangma further claimed that Meghalaya’s share of grants-in-aid for revenue deficit is comparatively lower than most NE states. He said, “This is because our revenue gap is much smaller than other states of the NE.”

Spelling out measures to generate additional resources, Sangma said the government proposes to withdraw exemption of 50 paise per litre on diesel and 50 per cent of Rs 1.13 exemption on petrol besides increasing the rate of tax on diesel from 12.5 per cent to 13.5 per cent.

Sangma also informed that increasing the rate of tax on cigarettes and similar items by another 7 per cent from the current 20 per cent and cess on cement clinkers is expected to generate additional resources to the tune of Rs 30.91 crore annually.

Further, Sangma said the government will introduce cess on clinker at Rs 20 per metric tonne as done earlier in the case of cement for the purpose of education. He said, “These measures are expected to generate additional resources to the tune of Rs 30.91 crore annually.”

In addition, the government also proposed to enhance the rate of cess on limestone from Rs 20 to Rs 40 per metric tonne, fire clay from Rs 5 to Rs 20 per metric tonne and sillimanite from Rs 300 to Rs 350 per metric tonne for the purpose of supporting primary education.

Sangma informed that the recent enhancement of tax from 13.5 per cent to 14.5 per cent under schedule IV of Meghalaya Value Added Tax Act will generate Rs 25 crore additional incomes apart from Rs 5.28 crore which is expected to be raised during the fourth quarter by increasing advolarem levy and reclassification of IMFL brands.

Shouldered with responsibility of ensuring better financial management, Sangma said, “The government intends to rational taxes and introduce efficient revenue realization mechanism.”

The state government has also pledged a development plan outlay of Rs 681.88 crore for education, Rs 555.2 crore for roads and bridges, Rs 509.9 for C&R department, 380.5 crore for health and Rs 147 crore for agriculture.

Following is the Development plan outlay for 2015-16:

Education – Rs 681.88 crore

Road and Bridges – Rs 555.20 crore

Community & Rural Development – Rs 509.90 crore

Health and Family Welfare – Rs 380.50 crore

Water Supply & Sanitation – Rs 309.40 crore

Soil & Water Conservation – Rs 263 crore

NEC Schemes – Rs 180 crore

Water Resources – Rs 169.80 crore

Urban Development 169 crore

Social Welfare – Rs 152.30 crore

Agriculture & Horticulture – Rs 147 crore