The Hindu : Front Page : YSR’s pet sector may take a hit

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Tuesday, Nov 25, 2008
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YSR’s pet sector may take a hit

M. L. Melly Maitreyi

HYDERABAD: The Congress government which has been taking pride for maintaining tight fiscal discipline during the last four years may, after all, seek exemptions from the Centre from the Fiscal Responsibility and Budget Management (FRBM) Act during the current fiscal.

A debate is raging in the higher echelons of the government whether to exercise this option or put in place a ‘contingency plan’ to tide over the shortfall of 15-20 per cent in revenue (Rs. 70,927-crore target) triggered by the overall economic slowdown. The FRBM Act stipulates that States should bring the revenue deficit to zero level by 2008-09.

The Congress government had the distinction of reaching the zero level and even attaining revenues surplus in 2006-07. But it may end this year with a deficit, leave alone achieving the Rs. 709-crore surplus anticipated in the 2008-09 budget.

The first casualty may be the Rs. 16,500-crore budget for Chief Minister Y. S. Rajasekhara Reddy’s pet irrigation sector which may be re-worked by axing some projects.

It is significant that Finance Minister K. Rosaiah had recently denied reports of differences with Dr. Reddy on the issue of downsizing the allocation for irrigation.

When asked for his views, Principal Secretary, Finance, I. Y. R. Krishna Rao said there was no cause for panic.

“No one is denying that there are no problems. But they are manageable. The government can seek funds under ‘ways and means’, ‘special ways and means’ from the Centre or avail of the overdraft facility. But we have not sought funds even under ‘ways and means’. We will find money for all the priority programmes of the government as also the salary bill.”

He said the remaining four months of the present fiscal may not pose a problem but mobilising adequate resources for the next financial year may present challenges.

The Finance Secretary pointed out that the Rs. one lakh crore budget for this year, includes plan expenditure of Rs. 44,000 crore.

“The situation is good so far with commercial taxes, mines and minerals, transport, devolution of central taxes contributing to more than 80 per cent of the targets in spite of slowdown,” he said.

However, the shortfall has been in the revenue expected from land auctions and the Stamps & Registration department due to a slump in real estate market.

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