West Bengal Finance Minister Asim Dasgupta today presented a deficit budget of Rs 4 crore for 2010-2011.
He said the initial deficit pegged for the next year was Rs 114 crore. However, with proposed additional resource mobilisation of Rs 110 crore, the deficit would come down to Rs 4 crore.
To keep the deficit low, Dasgupta has shown loans taken from the market and loan and advances from the central government under the head of capital receipts. The total loan amounts to Rs 27,720 crore.
The plan expenditure for 2010-11 has been kept at Rs 16,735 crore, a 19 per cent rise over last year, while the total budget expenditure (plan and non-plan) has been pegged at Rs 76,432.07 crore, an eight per cent rise over last year’s budget.
Dasgupta has lowered the tax rate from 12.5 per cent to four per cent for perforated metal, casing on bearings, block boards, particle board and spare parts of electric fans.
However, mobile phones, DTH services and imported liquor would be dearer. DTH service providers have been brought under the amusement tax net, while the value-added tax (VAT) on mobile phones with the maximum retail price exceeding Rs 3,000 has been increased from four per cent to 12.5 per cent. Sales tax on foreign liquor has been raised to 37 per cent from 30 per cent.
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Keeping rising food prices in mind, VAT exemption has been extended to imported sugar till March 2011.
On the basis of an increase in the state’s own revenue collections, Dasgupta said, it would be possible to reduce the ratios of the state’s fiscal deficit to state domestic product (SDP) and state’s revenue deficit to SDP from 6.7 per cent and 5.6 per cent in the current year to 4.7 per cent and 3.5 per cent, respectively, in the next year.
The state is also banking on revenue from goods and services tax, as well as the benefits of debt relief and state-specific grants, to reduce the ratio of state’s fiscal deficit to SDP to 3.5 per cent and 1.6 per cent, respectively, in 2011-12, and then to three per cent and zero per cent in 2014-15.
Contrary to his earlier stand, in the context of higher revenue collection, the West Bengal government would now consider the possibility of introduction of the Fiscal Responsibility and Budget Management (FRBM) in the next year, announced the finance minister.
The 13th Finance Commission has stipulated FRBM as a precondition for the states to avail of the benefits of recommended debt relief and state-specific grants.
With an eye on the assembly elections next year, the government would create around 100,000 jobs. Government intervention, like launching a new scheme on the lines of the National Rural Employment Guarantee Scheme (NREGS) for the urban poor and giving further financial incentives to state’s more than 9 million women members of self-help groups, are likely to be able to push through the target. Special packages have been announced in the budget for the minority and backward communities.
An ambitious plan of expanding the existing scheme that offers rice at Rs 3 per kg to the people living below poverty line (BPL) in the rural areas to lowest 20 per cent people living above poverty line (APL) was announced by the finance minister.
The estimated rate of growth of gross state domestic product of West Bengal would reach 8.3 per cent in the current year, with the growth from agriculture, industry and services estimated at 4.2 per cent, 3.8 per cent and 10.5 per cent, respectively.