Roads, welfare and higher education hogged the limelight of the Kerala State Budget for 2011-12 presented to the State Assembly here on Thursday and projecting an overall deficit of Rs 153.04 crore.

The Finance Minister, Dr T.M. Thomas Isaac, did not propose any additional resource mobilisation in what was his ‘swansong' budget, sixth on a trot, but committed himself to an incremental expenditure of Rs 753.41 crore, inflating the cumulative deficit of Rs 730.67 crore.

SWANSONG BUDGET

This is despite what has probably been the best financial year for the State insofar as tax buoyancy goes and creditable dividends accruing in the form of reduced revenue and fiscal deficits.

But that was the price the Finance Minister was willing to pay while signing off not just the financial year but also end of the term of the Government.

Dr Isaac said that the present estimation was that the revenue receipts for 2010-11 (Rs 32,127 crore) will be Rs 946.19 crore higher than the amount anticipated in the Budget Estimates for the year. This would bring down the revenue deficit to 1.41 per cent from 1.48 per cent.

According to the revised estimates, the fiscal deficit was also expected to come down to 2.89 per cent from 3.49 per cent.

Even the weather gods seem to have helped the Finance Minister's cause thanks to their intervention through ‘prolonged rains,' as Dr Isaac himself admitted.

A ‘significant change' for the better had come about, considering that against an expenditure of Rs 2,250 crore anticipated under the Non-Plan capital side, the expected expenditure was Rs 646.56 crore only.

This was because of the works getting delayed due to the rains, he said.

However, the total expenditure is not expected to fall because of increased revenue expenditure through supplementary demands for grants, Dr Isaac clarified.

Budget estimates for the financial year 2011-12 suggest that overall expenditure is likely to increase by 23.6 per cent in 2011-12.

This is after provisions being made for all expenditures including that on account of the pay revision.

However, the revenue growth is expected to continue at the same rate as in current year and, on that basis, the revenue deficit could be maintained at 1.97 per cent, he hoped.

Provision has been made for capital expenditure under Non-Plan. Given this, fiscal deficit at 3.48 per cent shall remain within the permissible limit.

Not only did the Finance Minister not propose any ARM, but he also went ahead announcing some tax concessions and other exemptions.

This was over and above the Rs 753.41 crore that he proposed in additional expenditure. While announcing the exemptions, he said that small traders with turnover not exceeding Rs 10 lakh are not liable to pay tax. This provision will be given retrospective effect from April 1, 2005.

Filing of hard copy of returns will be dispensed with when e-filing stabilises. This will be implemented within six months. Input tax credit will be allowed on the excess turnover exceeding Rs 50 lakh.

Related Topics
comment COMMENT NOW