Home > Money > Budget > Budget News & Analysis MARCH 8, 2002 | 16:35 IST    Feedback 


     
Interviews
Business Headlines
Corporate Headlines
Columns


 Portfolio Tracker
 

  My Portfolio

The Union Budget 2001-02
Economic Survey 2000-01
Exim Policy 2001-02
Credit Policy 2001-02
Railway Budget 2001-02
Budget Tutorial
Budget Process
Budget 2000-01
Budget 1999-2000
 



Kerala Budget shows Rs 2.73 billion deficit

Kerala's Budget for 2002-03, presented on Friday by the finance minister K Sankaranarayanan, shows a deficit of Rs 2.73 billion and no major new taxes.

The Budget was presented in a backdrop of severe cash-crunch faced by the state and a prolonged strike by the employees.

Protesting against the government's economic management of the state, the opposition Left Democratic Front members boycotted the Budget speech after shouting slogans for about 10 minutes.

Sankaranarayanan said the rate of compounded tax payable by dealers of jewellery would be hiked to 200 per cent of the tax payable by them in the preceding year. An additional revenue of Rs 150 million was expected from this.

He said it had come to the notice of the government that a number of high value goods were brought to the state without paying tax. To prevent this and augment revenue, he proposed to levy entry tax under the Kerala Tax on Entry of Goods into Local Areas Act 1994 on various items.

The entry tax would be applicable to electrical goods, sanitary equipment, edible oil, timber, granite, light diesel oil, ready mix concrete, fans, grinders and live chicken and meat.

The rates would vary from four per cent to 37 per cent. The net yield expected was Rs 300 million.

He expected another Rs 50 million from an increase of the tax on bullion and precious stones from one per cent to four per cent.

Explaining the overall financial position, Sankaranarayanan said on account of the severe financial crisis, especially in the agricultural sector, there had been some adverse effect on the revenue collection this year.

But what had hurt most was the fact that about Rs 3-3.5 billion of the revenues that should have been accrued this year for financing development efforts of the government had been collected in advance (by the previous LDF government) before march 31, 2001.

''I have stayed away from committing any such impropriety, which ultimately violates the sanctity of the budgetary process,'' he said.

He said he had indicated the 25 per cent reduction in the annual Plan size in the revised estimates. In spite of this reduction in Plan expenditure, there was a yawning gap of Rs 6.49 billion during the current year.

''This indeed should poignantly bring home the magnitude of the fiscal crisis that the state is experiencing,'' he said.

Sankaranarayanan said he had attempted to tackle the twin problems of rising fiscal deficit and growing interest payments through a balanced approach of raising revenues as well as pruning expenditure.

He had allowed only a growth rate of 7.61 per cent in the revenue expenditure, while at the same time attempted a growth rate of 10.04 per cent in revenue receipts.

Explaining the Budget estimates for the next year, he said he expected revenue receipts of Rs 116.93 billion and revenue expenditure of Rs 138.94 billion, leaving a revenue deficit of Rs 22 billion. Capital expenditure was estimated at Rs 6.68 billion, public debt (net) at Rs 27.24 billion, loans and advances (net) at Rs 848 million and public account (net) at Rs 8.45 billion.

The overall surplus estimated was Rs 6.16 billion.

Stating that the path forward was not easy and it called for some sacrifice from all sections of the people, he said this support should come first and foremost from the striking employees, who have more than a perfunctory interest in the financial well-being of the state.

He called upon all government employees and teachers to appreciate the gravity of the times and return to their posts of duty in the larger interest of the state.

YOU MAY ALSO WANT TO READ:
The Rediff Budget Special
More Budget Stories
Interviews
Money


 
   1996 - 2002 rediff.com India Limited. All Rights Reserved.