Shillong, March 18: Meghalaya's budget estimates for 2015-16 witnessed a significant plunge in both receipts and expenditure, but with a considerable increase in fiscal deficit, compared to the 2014-15 estimates.
Presenting an estimated fiscal deficit budget of Rs 819 crore for 2015-16 in the Assembly here today, chief minister Mukul Sangma announced measures for additional revenue mobilisation. These could provide some respite following the drastic fall in revenue collection because of the National Green Tribunal (NGT)'s interim ban on coal mining.
Sangma, who also holds the finance portfolio, announced that total receipts for 2015-16 are estimated at Rs 8,434 crore while the total expenditure is estimated at Rs 9,253 crore, leaving a fiscal deficit of Rs 819 crore, which is around 2.8 per cent of the Gross State Domestic Product (GSDP).
In the 2014-15 budget estimates, the receipts were estimated at Rs 11,156 crore while the expenditure was pegged at Rs 11,683 crore, leaving a fiscal deficit of Rs 527 crore, which was around 2.2 per cent of the GSDP.
Sangma admitted on the floor of the Assembly that the NGT ban on coal mining has made the budgeting exercise a daunting task.
In the budget speech, the chief minister said, "The most daunting task in presenting the budget this year is the huge revenue shortfall faced by the state because of the impact of the NGT ban on coal mining. The state's own revenue is reduced by around Rs 600 crore annually on account of the ban. I am exploring all other possible sources to generate additional revenue."
However, he said these "unforeseen challenges" would motivate the government to work harder and maintain fiscal, social and economic stability.
As part of the government's exercise to generate additional revenue, Sangma announced some tax and non-tax proposals, which would be undertaken from 2015-16.
On tax and non-tax revenue, he said in 2014-15 the state's own tax revenue was estimated at Rs 1,206 crore while its non-tax revenue was Rs 679 crore. For 2015-16, the state's own tax revenue is estimated at Rs 1,035 crore, and its non-tax revenue is Rs 312 crore.
Sangma stated that the recent enhancement of the rate of tax from 13.5 per cent to 14.5 per cent under Schedule IV of the Meghalaya Value Added Tax Act would generate an additional revenue of approximately Rs 25 crore annually.
The government is also expected to raise revenue of Rs 5.28 crore during the fourth quarter through the increase of ad valorem levy and the re-classification of IMFL brands.
"Shouldered with the responsibility of ensuring better financial management, the government intends to rationalise taxes and introduce efficient revenue realisation mechanism. Other measures are being worked out for creating alternative sustainable sources of revenue," the chief minister said.
Moreover, Sangma informed the House that the projected transfer of funds for the Fourteenth Finance Commission period from 2015-2020 is Rs 27,270 crore, which is an increase of 177 per cent over the Thirteenth Commission award, under which Meghalaya received Rs 9,842 crore as total transfers.
According to the Fourteenth Commission's recommendations, the state's share of tax devolution out of the divisible pool is projected at Rs 25,347 crore, grants-in-aid for revenue deficit is Rs 1,770 crore, grants-in-aid for the State Disaster Relief Fund (SDRF) Rs 121 crore and grants-in-aid to urban local bodies Rs 32 crore.
The chief minister said one of the challenges out of the Fourteenth Commission recommendations is creating the fiscal space for supporting ongoing projects under Special Plan Assistance, which amount to over Rs 2,000 crore.
"We shall vigorously pursue this matter with the Centre so that the state receives its due entitlements to complete these ongoing projects in a time-bound manner," he said.
