With his eyes set on social sector reforms, the Gujarat Finance Minister Saurabh Patel, today presented the modified budget for the year 2014-15 here. With an overall surplus estimates of Rs 454 crore for the year 2014-15, the Rs 1,33,465-crore State budget has highest-ever provisions made for social sector mainly focusing on education, employment and healthcare.

“We have tried to give priority to employment generation and empowering women by increasing their income levels. This year, 48 per cent of the planned expenditure is allocated for social sector,” Patel said addressing media after his budget speech in the state assembly. As the Lok Sabha elections were held in May, the state government had presented vote-on-account for April-July period in February this year.

There is a 22 per cent increase in developmental expenditure and planned expenditure for the year to Rs 93,648 crore and Rs 71,330 crore respectively.

Besides the social sector spend, the state budget has made provision of Rs 5,067 crore for energy sector, under which the state government will set up new substations, transmission lines as well as provide over 100,000 agriculture power connections during the fiscal.

Also, the government has made provision for construction of Narmada canals in Saurashtra region at the cost of Rs 1,406 crore, Rs 1,422 crore for North Gujarat and Rs 1,138 crore for Kutch region during 2014-15.

The Chief Minister, Anandiben Patel termed the budget as development-oriented and supportive for inclusive development of the state.

State’s fiscal deficit is estimated to be at 2.45 per cent of the Gross State Domestic Product (GSDP), which is below the permissible FRBM limit of 3 per cent. State’s public debt is expected to reduce from 22.73 per cent of GSDP in 2009-10 to 19.13 per cent estimated for 2014-15. The same was as high as 28 per cent in 2004 when the state government had taken up fiscal consolidation to bring down its debt burden.

This also helped the state to reduce its interest payments from as high as 27 per cent in 2004 to 14.10 per cent in 2013-14 and estimated 13 per cent for 2014-15.

New schemes

The state government has announced schemes to promote animal husbandry by women by introducing a scheme, among others, for providing financial support for women breeders of milk cooperatives. This will be in the form of interest subvention on bank loans, financial support to purchase milking machines and equipment.

While there were no big announcements for major industries like textiles, ports and manufacturing sector, the minister announced a special package of Rs 100 crore for small and micro industries that will generate large scale employment in the state.

Aiming to make local industries competitive nationally, the government has proposed to reduce the tax credit on purchases of goods made from within the state and used in interstate sales by half from 2 per cent to 1 per cent. Also, the minister tried to plug several loop holes in the stamp duty structure, thereby generating estimated revenues of Rs 14 crore and Rs 20 crore respectively from development agreement and partnership deeds.

Industry reactions:

The industrial associations and trade bodies appreciated the Gujarat State Budget presented by Saurabh Patel, Finance Minister of Gujarat.

Kunjal Patel, Chairman - CII Gujarat State Council & Managing Director, Voltamp Transformers Ltd said that the vision presented in the budget is very much in line with what CII believes in. “The finance minister has highlighted the importance and given support to MSMEs, which are key to reviving the economy,” he said in a statement issued here.

While Bhagyesh Soneji, chairperson, ASSOCHAM Gujarat Circle expressed confidence on the announcements for Infrastructure development initiatives, allotments for power generation and airport development for accelerating the growth.

However, she expressed disappointment as Manufacturing sector was 'a bit ignored'.

Meanwhile, Vadodara-based Federation of Gujarat Industries (FGI) termed the state budget growth oriented and far sighted.

Related Topics
comment COMMENT NOW