At a time when there are general apprehensions about the ongoing financial meltdown, Haryana Finance Minister Birender Singh doesn’t seem to be too affected. Yet, he is working out plans to cope with any situation that could put the financial system of the state into doldrums. In a tete-a-tete with Komal Amit Gera in Chandigarh, Singh explained how his department was gearing up to face the repercussions of the global financial downturn. Excerpts:
How is Haryana preparing to face the impact of the global financial meltdown?
The first two quarters of the current financial year were quite comfortable in the sense that we clocked in 23 per cent increase in the collection of value added tax (VAT). But there is a cause of concern as there was a dip of 6-7 per cent in October. The impact may be more glaring in the coming quarter so we have started taking measures.
What are the measures you have taken?
We have called the meeting of the committee on resources mobilisation next week under the chairmanship of Chief Minister Bhupinder Singh Hooda. All the senior functionaries from various departments, boards and corporations would participate and apprise the chief minister about the impact on their stream and suggest the course of action.
What purpose does it serve?
As you know, besides various forms of taxes like VAT, luxury tax, central sales tax, entertainment tax, local area development tax, entry tax, passenger and goods tax and excise, the state earns from non-taxable collection (various boards and corporations) as well. This would help the government to monitor the non-taxable collection.
What has been the state’s performance in tax collection this year?
The target for tax collection in the current year is Rs 11,840 crore. Of this, Rs 6,139 crore has been collected (till October 2008) that is about 52 per cent of the target. The last year target was Rs 11,808 crore.
Haryana has been able to attract many proposals for foreign direct investment (FDI) in the past. Do you think it would be hit?
I think more than the manufacturing sector, the services sector is likely to be hit as most of the BPOs operating in the NCR falling in Haryana are associated with US-based companies and a recession in the US may affect their volumes.
Is there any any sector which is doing well at this time?
Agriculture is the backbone of our state. We registered 3.6 per cent growth last year and expect to grow at 4 per cent this year.
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Where do you think growth in agriculture will come from as Haryana already has 87 per cent of its land under cultivation?
We plan to focus on intensive agriculture by extending better agri-extension services to the farmers and expanding our command area development programmes.
In the current scenario, the central government may also cut down its grant to various states due to the pressure on its resources. How will you offset it?
It’s quite premature as no concrete plan has been chalked out but we will have to resort to austerity. About 39 per cent of the Budget expenses are utilised in running the government. We would regulate the expenditure by determining our priorities and avoid unimportant expenses.