Land income fuels Andhra's Plan outlay

Rise in non-tax revenues and receipts from land registrations apart from the general buoyancy in sales taxes marked the outgoing financial year.

The trend is likely to continue in the new fiscal too helping the Andhra Pradesh government retain its top slot in the plan expenditure in the country.

The fiscal prudence norms envisaged by the state Fiscal Responsibility and Budget Management Act(FRBMA) and the ambitious programmes being taken up under annual plans have made the government to look towards other sources of income.

Consequently, income from land sales became an important source to the government exchequer.

Post lifting of liquor ban in the state in 1996-97, excise income from the sale of liquor became the second most important source of revenue after commercial taxes.

But now, from last year, the sale of government lands and general land transactions have turned out to be an even more significant source of income.

The projected income from the sale of government lands for the current year has been revised upward to Rs 4,648.78 crore from the budgetary estimate of Rs 3,027 crore.

Income from this source was almost nil when the Congress came to power during the year 2004-05. The sale of just a hundred acre land on the city outskirts recently fetched the government Rs 1,000 crore.

Similarly, revenue from stamps and registration department is all set to jump by over 60 per cent to touch the budgetary estimate of Rs 2,500 crore from about Rs 1,500 crore last year.

According to finance department officials, the revenue from this department is expected to grow by about 40 per cent next year moving closer to the excise income levels while the average increases of state tax revenues during the same period are expected to grow by about 18 per cent.

The latest estimates also revised the sales tax receipts for the current year slightly upward to Rs 15,665 crore from the budgetary estimate of Rs 15,465 crore and up 19 per cent, compared with the previous year's estimates of Rs 13,156 crore, indicating a general buoyancy in the economy.

The state exchequer, which received Rs 17,262.74 crore from taxes as on January 25, 2007, is expected to get Rs 23,911.63 crore in tax revenues for a whole year, an increase of 19.67 per cent, compared with close to Rs 20,000 crore tax receipts in the previous financial year.

Non-tax revenues have been projected at Rs 6,415 crore this year as against the budgetary estimates of Rs 5,240 crore, mainly on account of increased projections in land-related income. Of this, mines and minerals, the second biggest contributor in this segment, is expected to fetch Rs 1,265 crore.

It is fairly clear that the government is leveraging non-tax revenues not only to meet the growing plan expenditure but also to meet shortfalls in central grants.

While the share in central taxes is expected to be about Rs 8,355.23 crore, a tad higher than the budgetary estimate of Rs 8,038.83 crore, a shortfall of over Rs 600 crore in central grants, compared with the budgetary estimation of Rs 4,074 crore, is being anticipated by the finance department for the current year.

In all, the latest estimates put the total revenue receipts for the current year at Rs 42,100 crore, higher by Rs 1,000 crore than the budgetary estimates. This figure is far higher compared with Rs 34,029 crore revenues during the previous year but still falls short of the total expenditure, which is usually met by borrowings and multi-lateral funding.

Expecting much higher levels of receipts from the Centre as well as from the state's own revenues, the state government is proposing to substantially increase the plan size to around Rs 25,000 crore in the next annual budget from the current level of Rs 20,000 crore, close to 50 per cent of which will be earmarked for the irrigation sector.