Haryana

HARYANA BUDGET: NO FRESH TAXES, VAT ON NATURAL GAS FOR INDUSTRY REDEUCED

March 09, 2018 01:06 PM

Chandigarh (Face2News)

While no fresh taxes have been proposed, VAT on natural gas used by industry has been reduced from 12.5 per cent to 6 per cent in the record Rs 1,15,198.29 crore Haryana Budget for fiscal 2018-19, presented by the Finance Minister, Capt Abhimanyu, to the State Assembly, today.

Unfolding the contents of his fourth consecutive and steeped-in-social-welfare Budget, Capt Abhimanyu said in consonance with the theme of “Haryana Ek Haryanvi Ek”, it aimed to usher in a new era of balanced growth where no one is left out of the state’s journey of all-round development and prosperity. The Budget seeks to combine fiscal prudence with sagacious use of resources to optimize their effect.

Marked by some firsts like aligning the allocations with Sustainable Development Goals, the Budget seeks to take the social welfare route to usher in an era of transformation and make tangible improvement in the quality of life both in urban as well as rural areas.

The Budget represents an increase of 12.6 per cent over the Swaran Jayanti Year Budget of Rs 1,02,329.35 crore last year, and 14.4 per cent over RE 2017-18 of Rs 1,00,739.38 crore. The Budget outlay comprises 26.1 per cent as capital expenditure of Rs 30,012 crore, and 73.9 per cent as revenue expenditure of Rs 85,187 crore.  

 Riding the crest of better realization of both tax and non-tax receipts, the Finance Minister has estimated revenue receipts at Rs 76,933.02 crore, including the state’s own tax receipt of Rs. 49,131.74 crore, and non tax-revenue of Rs. 11,302.66 crore.   

The major sources of tax revenue are GST Rs. 23,760 crore, VAT Rs. 11,440.00 crore, Excise Duty Rs. 6,000 crore and Stamp and Registration Rs 4,500 crore.  The non-tax receipts include, among others, EDC Rs 4,000 crore, Transport – Rs 2,000 crore and Mines Rs 800 crore. 

Besides, the government can borrow up to three per cent of its GSDP. Further grant-in-aid from the Government of India is another major source of funding in the current fiscal, Capt Abhimanyu added. 

Recapitulating the share of budgetary allocations to different sectors in fiscal 2018-19, he said these had been hiked in most cases. About 28.7 per cent of the total budget has been allocated to economic services like agriculture and allied, irrigation and rural electrification subsidy 12.22 per cent, power 5.87 per cent, transport, civil aviation, road and bridges 4.73 per cent, rural development and panchayats 3.76 per cent and others 2.12 per cent. 

While 33.89 per cent is allocated to social services comprising education 12.96 per cent, social welfare 7.46 per cent, health and family welfare 4.14 per cent, public health engineering 3.20 per cent and others 6.13 per cent, general services get 14.4 per cent share. These include administrative services 4.79 per cent, pension 7.21 per cent and others 2.40 per cent. Also, 23.01 per cent has been allocated for repayment of debt that is principal 10.82 per cent and interest 12.19 per cent. 

Giving an overview of the economy, the Finance Minister said that firing on all cylinders, the economy of the state was on the uptick with most key parameters, especially GSDP, GSVA, revenue receipts-to-GSDP-ratio, capital expenditure, and per capita income making an upward graph. 

Besides, the increasing trend of revenue deficit has been reversed, fiscal deficit kept within limits and the break-up of the contribution of different segments points to the trends that bear the mark of a developing and maturing economy. 

During the current year 2017-18, as per Advance Estimates, the GSDP of Haryana was expected to achieve growth of eight per cent, as against 6.6 per cent recorded at the national level. 
    The growth of Gross State Value Added (GSVA) in primary sector has been estimated at 2.5 per cent in 2017-18. It is 7.7 per cent in secondary sector and 9.4 per cent in tertiary sector. The corresponding figures at National level for 2017-18 have been estimated at three per cent for primary sector, 5.1 per cent in secondary sector and 8.3 per cent in tertiary sector. 
          The per capita income of the state at current prices in 2016-17 was estimated at Rs. 1,78,890 which is likely to further increase to Rs 1,96,982  in 2017-18 as compared to all-India figure of Rs. 1,12,764 making it one of the highest in the country. 
               Out to translate the vision of the Prime Minister, Mr Narendra Modi, to double the income of farmers by 2022, the Finance Minster listed a slew of measures to make agriculture remunerative, enhance agricultural productivity and mitigate the physical, financial and psychological distress of farm households and landless workers.
              Knowing full well that the route to jobs is paved with skills, the Finance Minister has increased the outlay for the Skill Development and Industrial Training Department in 2018-19 to Rs 657.94 crore, which is 43.43 per cent over and above Rs 458.71 crore provided in 2017-18.
          “Following prudent fiscal management policies during the last three years, the present government has been able to keep all fiscal parameters, except the revenue deficit, within the limits prescribed by the 14th Finance Commission and under the FRBM Act. Even in the case of revenue deficit, the Government has been able to reverse the increasing trend”, Capt Abhimanyu said. 
            This is clear from the fact that in 2016-17 the revenue deficit, which was 2.92 per cent of GSDP, had declined to 1.80 per cent in 2017-18 BE and it is likely to further reduce to 1.35 per cent at 2017-18 RE. “For the fiscal 2018-19, I have targeted to bring it further down to around 1.20 per cent of GSDP and by the end of 2019-20, we aim to bring it close to zero”, he added.
          The Minister said that Effective Revenue Deficit is a much better indicator since it excludes grants given for creation of capital assets from revenue deficit. Our position on this measure is much more comfortable. The Effective Revenue Deficit was 1.19 per cent of GSDP at 2017-18 BE as compared to 2.81 per cent in 2016-17. At RE 2017-18, it is likely to be only 0.52 per cent of GSDP. This proves the point that more emphasis was laid on the creation of capital assets in the economy in 2017-18 as compared to earlier years. The same trend is likely to continue in 2018-19 with a projected effective revenue deficit of just 0.39 per cent of GSDP.
       Fiscal deficit has remained within the stipulated limit of three per cent of GSDP prescribed by the 14th Finance Commission for the states.   
             Referring to implementation of Direct Benefit Transfer (DBT) in Haryana, Capt Abhimanyu said that the State Government has eliminated the middle-men and ghost beneficiaries by implementing Direct Benefit Transfer (DBT) scheme in various schemes including pension, scholarship and public distribution system, which resulted in savings of about Rs 1,000 crore annually. 
          He complimented the Government of India for an unprecedented highest ever jump in India’s ranking by 42 places in the last three years in the World Bank “Ease of Doing Business” which has been made possible due to the dynamic leadership of the Prime Minister, Mr Narendra Modi, to carry out path-breaking reforms. 
          The Finance Minister extended support of the state government to Centre in taking “Ease of Doing Business” further to “Ease of Living” for the common people of the country, particularly those belonging to the poor and middle strata of society, and welcomed constitution of the 15th Central Finance Commission. 
           Haryana is one of the few states that have prepared their own Vision 2030 Document, based on Sustainable Development Goals (SDGs), with the assistance of UNDP. In its maiden effort, the state government has attempted to align the budget allocation with SDGs and evolve a mechanism to monitor the implementation through a comprehensive list of global as well as national indicators. Out of total budget of Rs 1.15 lakh crore, an amount of Rs 44,911.16 crore has been allocated to schemes which lead to the attainment of 15 SDGs in due course of time, he added, 

“Needless to say, I have tried to take every stakeholder on board in consonance with the theme of“Haryana Ek Haryanvi Ek”. I am personally thankful to each and every member of this august House for giving patient hearing to my Budget speech. I request all members to discuss, debate and adopt my Budget proposals, which aim to usher in a new era of balanced growth wherein no one is left out of the state’s journey of all-round development and prosperity. With these words, I commend the Budget for the year 2018-19 to the House for its consideration and approval”, the Finance Minister concluded. 

GOVT.ELIMINATED MIDDLE MEN AND GHOSE BENEFICIARIES BYIMPLEMENT DBT
 
The Haryana Finance Minister, Capt. Abhimanyu said that the State Government has eliminated the middle-men and ghost beneficiaries by implementing Direct Benefit Transfer (DBT) scheme in various schemes including pension, scholarship and public distribution system, which resulted in savings of about Rs 1,000 crore annually. 

While presenting the budget in the Vidhan Sabha, here today, Capt Abhimanyu said that the State became Kerosene-free from April 1, 2017. This has resulted in saving of about Rs. 270 crore per annum and Haryana is the only State to have achieved this milestone. As many as three lakh plus LPG connections have been given which have spared these homes from the menace of black smoke.
          The Finance Minister said that the State Government had constituted the Fifth State Finance Commission with Prof. Mukul Asher as Chairman along with eight other members in May 2016. As per the terms of reference, the Commission had to make recommendations relating to devolution of funds to Local Bodies, both rural and urban and measures to increase their financial resources.  

The Commission had submitted its Report to the Government in September 2017, which was being examined by a Cabinet Sub Committee. As an interim measure, the devolution of funds for the year 2018-19, to rural and urban local bodies, will continue on the existing pattern, he added.
 
*Firing on all cylinders, the economy of Haryana is on the uptick with most key parameters, especially Gross State Domestic Product (GSDP), Gross State Value Added (GSVA), revenue receipts to GSDP ratio, capital expenditure, and per capita income making an upward graph.
      Besides, the increasing trend of revenue deficit has been reversed, fiscal deficit kept within limits and the break-up of the contribution of different segments points to the trends that bear the mark of a developing and maturing economy.
        Disclosing this while presenting the Budget for 2018-19 in the State Assembly today, the Finance Minister, Capt Abhimanyu, said according to Advance Estimates, the GSDP of Haryana was expected to achieve growth of 8 per cent in the current fiscal 2017-18 against 6.6 per cent recorded at the national level.
    At current prices, the GSDP has been estimated as Rs 6.08 lakh crore for 2017-18, contributing 3.7 per cent to the all-India GDP of Rs 167.52 lakh crore. At constant prices, the GSDP has been estimated as Rs. 4.78 lakh crore, which is 3.7 per cent of the all-India GDP of Rs.130.04 lakh crore, in 2017-18.
          The growth of GSVA in the primary sector has been estimated at 2.5 per cent in 2017-18, 7.7 per cent in secondary sector, and 9.4 per cent in tertiary sector. The corresponding figures at national level for 2017-18 have been estimated at 3 per cent for primary sector, 5.1 per cent in secondary sector, and 8.3 per cent in tertiary sector.
          Capt Abhimanyu said the composition of state GSVA had shown structural bend towards the services sector, a sure sign of developing and mature economy. The share of tertiary sector at constant prices has increased from 49.4 per cent in 2014-15 to 50.9 per cent in 2017-18. The share of secondary sector remains more or less constant around 31 to 32 per cent during the last three years.
          At the national level, the share of services sector has increased from 52.4 per cent in 2014-15 to 54.2 per cent in 2017-18. The share of primary sector has decreased from 19.5 per cent in 2014-15 to 18 per cent 2017-18, and in the secondary sector, from 28.1 per cent to 27.8 per cent, during the same period.
          The per capita income of the state at current prices in 2016-17 was estimated at Rs. 1,78,890 which is likely to further increase to Rs 1,96,982  in 2017-18 as compared to all-India figure of Rs. 1,12,764  making it one of the highest in the country.
          The Finance Minister said the Credit Rating Information Services of India Limited (CRISIL), a global analytical company, in its report “State’s growth” published in January, 2018 had bracketed  Haryana with top three states “in terms of gross value added (GVA) of labour-intensive sector as well as overall GDP between fiscals 2013 and 2016”.  
Fiscal Parameters

Following prudent fiscal management policies during the last three years, the present government has been able to keep all fiscal parameters, except the revenue deficit, within the limits prescribed by the Fourteenth Finance Commission and under the FRBM Act.
          Even in case of revenue deficit, the government has been able to reverse the increasing trend. This is clear from the fact that in 2016-17 the revenue deficit, which was 2.92 per cent of GSDP, had declined to 1.80 per cent in 2017-18 BE and  is likely to further reduce to 1.35 per cent in 2017-18 RE.  “For  fiscal 2018-19, I have targeted to bring it further down to about  1.20 per cent of GSDP, and, by the end of 2019-20, we aim to bring it close to zero”, Capt Abhimanyu said.
          However, effective revenue deficit which is a much better indicator by excluding grants given for creation of capital assets from revenue deficit, the state’s position is much more comfortable. The effective revenue deficit was 1.19 per cent of GSDP at 2017-18 BE as compared to 2.81 per cent in 2016-17.
          At RE 2017-18, it is likely to be only 0.52 per cent of GSDP. This proves the point that more emphasis was laid on the creation of capital assets in the economy in 2017-18 as compared to earlier years. The same trend is likely to continue in 2018-19 with a projected effective revenue deficit of just 0.39 per cent of GSDP. 
        Fiscal deficit has remained within the stipulated limit of 3 per cent of GSDP prescribed by the Fourteenth Finance Commission for the states. In 2015-16, fiscal deficit of the state was 2.92 per cent of GSDP, while in 2016-17, it was 2.91 per cent of GSDP (without UDAY). In 2017-18 BE, fiscal deficit was 2.84 per cent (with UDAY) and 2.40 per cent of GSDP (without UDAY), which is further likely to decline marginally to 2.83 per cent (with UDAY) and 2.48 per cent (without UDAY) at RE 2017-18. For 2018-19, it is likely to be 2.51 (without UDAY) and 2.82 percent (with UDAY) of GSDP.

Capital Expenditure
          Capt Abhimanyu said the state government was committed to enhancing proportion of capital expenditure in total expenditure, which has a direct impact on growth. “I am happy to inform this august House that as against the total capital expenditure of Rs 22,393.51 crore estimated at BE 2017-18, we are able to increase it further to Rs 22,428.08 crore at RE 2017-18. For the next fiscal 2018-19, I propose to increase it further to Rs 30,012 crore, indicating 34 per cent increase over 2017-18 BE,” Capt Abhimanyu said.
          In addition, the public sector undertakings are also making investment for creation and strengthening capital infrastructure in the state. It is estimated that PSUs will make capital investment of Rs 4,741 crore in 2018-19. Hence, total capital expenditure is estimated to be Rs 34,753 crore in 20018-19.
          Debt to GSDP ratio remained within the prescribed limit of 25 per cent.  It was 18.09 per cent in 2016-17 and 19.04 per cent in 2017-18 (RE), without UDAY; and 22.85 per cent in 2016-17 and 23.30 per cent in 2017-18 (RE), with UDAY.  In 2018-19, it is estimated at 19.66 per cent without UDAY and 23.44 per cent with UDAY.
          Total Revenue Receipts (TRR) as a ratio of GSDP is estimated at 11.52 per cent in 2017-18 RE as compared to 9.63 per cent in 2016-17. It is a very significant development having direct impact on State resources. 
          For Revised Estimates 2017-18, Total Revenue Receipts (TRR) are estimated at Rs 70085.13 crore, comprising tax revenue receipt of Rs 53061.52 crore (75.71 per cent) and non-tax revenue receipt of Rs 17023.61 crore (24.29 per cent).  “In 2018-19 Budget Estimates, I propose TRR at Rs 76,933.02 crore of which tax receipt is Rs 58,431.74 crore and non-tax receipt Rs 18501.28 crore, which is expected to be 11.19 per cent of the GSDP”, he said.
          The state government has made considerable progress in Treasury Management through implementation of Integrated Financial Management System (IFMS) and Public Finance Management System (PFMS) for online monitoring of flow of funds from government to end-user on a real time basis. 
          “We are also able to bring the unutilized funds lying in bank accounts in State kitty through Personal Ledger Accounts (PLA) / Personal Deposit Accounts (PDA) / other deposits. In this sequence, I propose a major procedural change to bring in financial discipline, by allowing departments and public sector undertakings including autonomous bodies to operate only one or two major bank accounts with effect from April 2018. This, inter alia, means that all the remaining bank accounts need to be consolidated into one or two accounts for efficient utilisation of funds”, Capt Abhimanyu said. 
          In order to promote highest standards of professional competence in accounting and auditing, the government has decided to restructure its State Subordinate Accounts Services (SAS) and audit cadre for which the Institute of Public Auditors of India, Chandigarh, is conducting a study. This will facilitate the cadre to do their job in a more professional manner and at the same time lead to better management of state finances in government departments as well as Public Sector Enterprises, he said.
Public Sector Enterprise Performance:
The Public Sector Enterprises (PSEs) play a critical role in capital formation, employment generation and growth of the economy. The performance of PSEs in the state has shown signs of improvement either in terms of reduction in losses or improvement in profits, Capt Abhimanyu said.
          Out of the 22 PSEs registered under the Companies Act 1956, 14 PSEs earned net profit in 2016-17, as compared to 13 PSEs in 2013-14. The profit earned by these 14 PSEs aggregated Rs 187.29 crore during 2016-17. The number of loss-making PSEs was reduced to eight in 2016-17 from nine in 2013-14. The net effect is that there has been reduction in overall losses from Rs 3,806.37 crore in 2013-14 to Rs 3,452.42 crore in 2016-17.
          Similarly, 19 PSEs registered under the Cooperative Societies Act 1984, have shown signs of improvement. This is reflected in the reduction of loss making PSEs from 13 in 2013-14 to 10 in 2016-17. The loss has been reduced from Rs 435.37 crore in 2013-14 to Rs 400.96 crore in 2016-17. 
          Similarly,  the number of profit-making PSEs have increased from five to eight and the their profit margins  have shown tremendous increase  from Rs 72.91 crore to Rs 337.30 crore, during the same period.
The performance of five PSEs, registered under special statutes have also shown improvement with  their profit margins increasing from Rs. 33.85 crore in 2013-14 to Rs. 51.03 crore in 2016-17.
          Though the PSEs are yet to reach their optimum levels of operational excellence, they continue to play a pivotal role in the creation of infrastructure and employment generation, the Finance Minister added.

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