As the Finance Department has initiated exercise on finalising the budget proposals for the current fiscal, the State is set to face high fiscal and revenue deficits.
In the first budget post bifurcation, the State is projected to commence its journey in fiscal 2014-15 with revenue deficit projected at Rs. 16,774 crore (Rs. 13,131 crore for 10 months), working out to 3.18 per cent of the GSDP.
This is much against the requirement of zero revenue deficit mandated by the Fiscal Responsibility and Budget Management regulation.
The high-level committee headed by Nabard former Chairman P. Kotaiah, in its report submitted to the government, estimated that the shortfall in resources as voted in the vote on account budget could be Rs. 25,574 crore, 4.84 per cent of the GSDP.
The shortfall is in addition to requirement of Rs. 2,048 crore for fulfilling the promise of enhancement in pensions. The report quoted the projections given to Planning Commission which pegged the fiscal deficit for 2014-15 at Rs. -15,638 crore (Rs. -11,995 crore for 10 months) which works out to 2.96 per cent. However, as per the vote on account budget, the requirement of resources would be around Rs. -37,910 crore, working out to 7.18 per cent of the GSDP much higher than the stipulated norm of 3 per cent.
On the resources front, the committee projected the State’s receipts to be around Rs. 59,922 crore of which the State’s own tax revenue would be of the order of Rs. 32,164, non-tax revenue Rs. 8,636 crore and receipts from the Central government in the form of share in Central taxes and Finance Commission grants pegged at Rs. 19,122 crore. In the Plan Budget, the committee estimated that the State would have resources to the tune of Rs. 8,416 crore.
As against the available resources, the State is expected to incur an estimated Rs. 17,216 crore revenue expenditure including a matching State’s share of Rs. 10,740 crore for Centrally assisted schemes and another Rs. 13,472 crore on capital expenditure taking the total to Rs. 30,688 crore.
“It is evident that the resources of Rs. 8,416 crore for plan budget is not even sufficient to meet the Centrally assisted schemes, including matching State share of Rs. 10,740 crore,” the committee said in its report.
