The Telegraph
Since 1st March, 1999
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Deficit budget with errors

Ranchi, March 19: Finance minister Stephen Marandi today unveiled his plans to spend Rs 231 crore more next year than the revenue the government expects to generate in 2007-08.

The Rs 231 crore deficit budget is an “improvement” on last year’s budget presented by the then NDA government, when the deficit was pegged at Rs 41.09 crore.

The budget size has been pegged at Rs 16,400 crore, 46 per cent (Rs 6,676 crore) of which is meant for development and new schemes i.e. plan head and 54 per cent (Rs 8,861 crore) for paying salary, pension and interest on loans etc i.e. the non-plan expenditure.

Presenting his maiden budget, Marandi’s budget speech was boycotted by the opposition which kept up a chant for a CBI probe into the “mysterious” death of a priest, Suresh Thakre, who was said to be close to the finance minister’s family.

The finance minister generously enhanced the MLA’s constituency fund from the current level of Rs 1.50 crore to Rs 2.50 crore. He also announced that a sum of Rs 50 lakh would be released to each legislator during the current fiscal itself, in other words before the end of this month. Legislators would be able to recommend “development work” in their constituencies.

Allocation for industry and transport, however, has been reduced by the UPA government by Rs 6 crore less than the last fiscal. In contrast, the agriculture department’s budget has gone up by Rs 125 crore.

From Rs 198 crore this year, it has been raised to Rs 323 crore for the next fiscal, which amounts to over 60 per cent increase over this year. Urban development department, too, has been favoured with a raise of Rs 90 crore.

Mistakes galore in the budget documents made it impossible for experts to comment.

For example, the documents suggest that the allocation for both energy and rural development will be less than the current year. In fact, if the documents are to be believed, the rural development budget next year will be less by Rs 450 crore at Rs 1,341 crore, down from current year’s allocation of Rs 1,802 crore.

But the three departments of energy, rural development and education take up 43 per cent of the budget though.

To make confusion more confounded, under the “Plan” Head, the rural development department has been given Rs 4 crore more than this year (Rs 546 instead of Rs 542 crore).

What is interesting, however, is that in both the budgets the non-plan expenditure for the department is almost three times higher than the plan expenditure.

Similarly, energy department is going to receive Rs 150 crore less than this year — all of it under the “Plan” head.

Observers were puzzled because not only is the state deficit in energy but the portfolio is also held by the chief minister himself.

Bandhu Tirkey’s HRD department’s figures showed some method in the madness, registering a Rs 162-crore increase over the current year. Significantly, only about Rs 48 crore out of this have been earmarked for development work and new projects while Rs 114 crore more will be spent by the department in paying salary.

While acknowledging that the Value Added Tax (VAT) had led to a 18 per cent rise in tax collection, the finance minister refrained from introducing any new tax or reduce present level of taxation on foodgrains.


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