High debt, deficit might impact Haryana's Budget

Estimated revenue deficit for 2014-15 stands at Rs 5,013 crore

Haryana's increasing debt burden, squeezing revenue and burgeoning expenditure are likely to remain hallmarks of the state Budget Estimates for 2015-16.

A projected lower revenue generation due to the colossal power subsidy (about Rs 5,338.5 crore in 2014-15), power theft, dwindling value-added tax and excise collections are major challenges before the officials of the planning and finance departments.

According to sources in the department, the revenue mismatch might severely hurt budgetary allocations. The estimated revenue deficit for 2014-15 stood at Rs 5,013 crore.

The Haryana government has proposed the Reserve Bank of India to issue Rs 750 crore of bonds. Institutional loans and market borrowings cannot exceed three per cent of the gross state domestic product, according to the guidelines by the Union finance ministry.

The expansion of National Capital Region (NCR) in Haryana has put a tremendous pressure on the government to ramp up infrastructure in this area. The NCR planning board provides at a subsidised rate to the state government that is insufficient. The loan has to be paid back and the state is already under financial stress.

Haryana has sought funds of Rs 3,878 crore to meet the infrastructure up gradation needs of NCR region. This includes the development of expressways, rapid rail transit system, Delhi-Sonepat-Panipat corridor and Haryana's share in the Delhi-Gurgaon-Rewari-Alwar Highway. About 46 per cent of the geographical area of Haryana falls in NCR.

"While there is no room to open new channels for increase in state's revenue, we need to tighten our belt," said a senior government official.

A central sales tax compensation of Rs 1,100 crore is pending with the Centre and implementation of the Goods and Services Tax might also curb the revenue generation in the state.