revenue expenditure

Budgets of Arunachal Pradesh

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Budgets of Arunachal Pradesh 2016-17

  • The estimated amount of money to be spent this financial year 2016-17is Rs.700 crore extra as compared to the last financial year, BE which stood atRs.12,533.62 crore,
  • The State’s share of Central Taxes under the 14th Finance Commission stood at Rs.7868.94 croreand central grants stood at Rs.3705.66crore, for FY 2016-17 The revenue receipt for the non-plan segment to be received from the centre is Rs.235.66 crore and for the plan segment is Rs.3470.00 crBudgets of Arunachal Pradeshore. Altogether, the revenue receipts from both centre and state amounts to Rs.12774.16 crore, a shortfall of Rs. 469.05 crore to meet the projected BE for FY 2016-17.
  • the plan segment for the FY2016-17, the Govt. projected the expenditure to be at Rs.6569.00 crore, this include revenue expenditure, capital expenditure and loans. Altogether the total expenditure projected for this FY2016-17 stands at Rs.13906.08 crore.

 

Health:

–From April 2016 onwards students pursuing BSc (Nursing), ANM and GNM would be given stipend of `1400 per month. With book grants of `3000, `2000, `1000 to BSc, GNM and ANM students respectively.
-De-addiction centre in Pasighat, Tezu, Hayuliang, Khonsa, Changlang and Longding. Proposed fund of `16 Crore in 2016-17
-Government proposed an allocation of ` 973.97 Crore in 2016-17

Education:

-State Govt. will create additional post of 184 teaching staff and 166 non- teaching staff.
-All schools shall be provided with 24X7 power supply by having provision from main line, solar inverter and DG Set in a phased manner
-Internet facility shall be made available wherever possible.
-From April 2016 onwards, Salaries of all SSA teachers will be paid regularly on a monthly basis.
-Enhanced rate of stipend to students; Class I to VIII – ` 900 Monthly, Class IX to XII- `1,100 and College Students – `1,400.
-Enhanced Annual Book grant to students;  MMBS students – ` 10,000, BAMS/BHMS/BDS – `  5,000, BE/BTech – ` 1,000 and Other Students – ` 1,000.  – Government proposed an allocation of ` 1985.98 crore in 2016-17 for education.

Labour and Employment:
-Government raised the minimum wages from `4500 to `6000 per month for unskilled and fixed ` 7000 for skilled labour.

Agriculture:

-Government proposed an allocation of about `182 Crore in 2016-17.

Horticulture:

-Government proposed to make a provision of `5 crore for a scheme to provide alternative source of livelihood to opium and cannabis growers. Under this scheme, farmers will get ` 7 lakh to setup large cardamom and kiwi gardens.
-Government propsed an allocation of about `27 Crore in 2016-17.

Environment and Forests:

-Proposed to make a tentative allocation of ` 10 Crore for raising 2 battalions of Eco-task force.
-7 Crore provision for up gradation of Itanagar Zoological Garden

Municipal Council:

-Allocation of `8.96 Crore for construction of collection points, dustbins in various locations of Capital Complex region.

-Government will create 60 posts including two executive engineers, four assistant engineers, and 7 junior engineers apart from ministerial staffs like UDC, LDC, Computer Operators and fourth grade staffs.

Building and Road:

-Proposal of `14 Crore for Jully bypass road and `12 Crore for Itanagar-Jote road.

Police:

-Government will provide 224 vehicles for mobility of police force.
– Provision of `44 Crore for construction of women police stations including housing facilities in all districts.

–Community Policing Suvidha Centre will be established to provide police services to the citizens and the aim behind it is to reduce fear psychosis of general public towards police.  Services to be provided by the CPSC are registration of foreigners, tenant verification, Registration and investigation of servants, Passport verification, Police clearance Certificate at the time of foreign immigration, Vehicle verification, Character verification, Copy of FIR, Missing reports etc.

-`1000 per month to police personnel as ration allowance.

IPR:

-Enhance the Corpus fund for journalist welfare from existing `1 crore to `2 crore. Additional `2 crore for construction of media colony increasing the total allocation from`3 crore to `5 crore.

Sports and Youth Affairs:

-Proposed `2 crore for CM football and Volleyball Trophy tournaments.

-`10 crore for setting up of a Youth Convention hall with resource centre and multi discipline hall at SLSA complex, Chimpu.

District Administration:

-Earmarked  `60 lakh to each Deputy Commissioner as untied fund for meeting the development needs of the district.

-Increased honorarium of `1500 to Head Gaon Burah and ` 1000 to the Gaon Burah.

DoTCL:

-Government proposed to keep a provision of `50 Crore in this budget for the overall development in the districts of Tirap, Changlang and Longding.

MLALAD:

-Proposed to increase MLALAD allocation from the current ` 1.25 Crore per annum to `2 Crore per annum.

Arunachal Pradesh Public Finance and Fiscal Policy

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Arunachal Pradesh Public Finance and Fiscal Policy

The own resource of the State to finance its budget is very low, and the state is highly dependent on the central inflow. Thus, the budgetary policy of the government is constrained by limited own resources on the one hand, and high unit cost of supply of public and merit goods, on the other.

The economic reform process initiated by the central government in the beginning of the 1990s has also constrained the state in terms of access to soft central resources. Adding to it, due to implementation of 6th pay commission, has resulted in bulging of the public debt which reached 68.9 per cent of the GSDP in 2006-07 and more than 100 percent in2008-09.Arunachal Pradesh Public Finance and Fiscal Policy

Further, easy access to market borrowing (after the implementation of 12th Finance Commission Report) has refueled the process, and as a result, outstanding liability of the state as shown in the budget of 2007-08 climbed to 100 percent of GSDP in 2008-9. It is with this background that the finance and fiscal issues of the state have to be considered.

Broad Budgetary trend

From 1993-94 to 2000-01, except the years 2000-01, the state had surplus in revenue account (Arunachal Pradesh Development Report, 2009). The surplus was more than 10 percent of GSDP. From 2001-02 to 2005-06 the surplus was less than 5 percent. From 2006-7 onwards the surplus became more than 10 percent in average up to the year 2012-13.

The trend in fiscal deficit is also same in line of revenue deficit. It was 3 to 9 percent of GSDP in between 1993-1998-99. In 1999-2000, it went up above 40 percent of GSDP then remained stable around 15 to 20 percent of GSDP).

From 2001-2 to 2005-06it was hovering around 12 to 15 percent of GSDP. After the stricture given by 12th Finance commission, fiscal deficit came down to less than 5 percent of GSDP up to in 2006-07, 2007-8 and in 2009-10.

Again from 20011-12 onwards fiscal deficit is hovering around 10 percent of GSDP. Interest payment as a percentage of GSDP was around 5-6 percent in between 1993-94 to 2000-01. From 2001 to 2006-7 it remained around 4 percent and there after started declining and became 2.46 percent in 2012-13.

Outstanding Debt

Market Loan: Share of Market loan in total outstanding liability has undergone a significant change over time during 1991-92 and 2007-08.1 In Arunachal Pradesh, the share went up from 12.24 percent in 1991- 92 to 19.27 percent in 2006-07. Then, with some variation marker loan alone constitute 26.44 percent of total outstanding liability in 2013-14. Thus, over time, market loan is gaining importance in the state.

 NSSF: As discussed above, NSSF became a separate head in the debt accounting system in 1999-2000. Therefore, here the analysis will pertain to the period 2000-01 and 2013-14. In 2000-01, NSSF had a small share of 0.14 percent in 2001-02. In 2006-07, the share became 19.27 percent in Arunachal Pradesh and hovered around as low as 9 percent in 2008-09 and became 15.63 percent in 2013-14.

Loan from Financial institutions: Under this head also a significant change in share was observed during 1991-92 and 2007-08 in Arunachal Pradesh. It was as low as 0.14 percent in 2000-01 and as high as 21 percent in 2006-07. Subsequently remained around 15-17 percent thereafter.

Loan and Advance from the Central government: Central government’s Loan and Advance to the states was around 56.33 percent in 2006-07 in Arunachal Pradesh.Wihh a steady decline it became 6.97 percent in 2013-14. Thus, in 2006-07, a drastic fall in the share of Central government loan in total outstanding debt liability took place. This was basically due to conversion of high interest rate bearing central loan by low interest loan from the market and financial institution. Further, it happened because of 12th Finance Commissions’ incentives.

 Public Accounts: Share of Public accounts in total debt liability was 40 percent and above in the state in 1991-2.Within the public accounts share of provident fund increased from 11.54 percent in 1991-92 to 36.33 percent in 2006-07. Then it declined to 11 percent in 2008-09. In between 2009-10 and 2013-14 it remained around 23 to 25 percent.

Implementation of FRBM Act in Arunachal Pradesh

In Arunachal Pradesh FRBM Act has been implemented since 2006-07. FRBM Act’s provisions were passed into a law in March 2006. Since then the State Government  has been implementing the different provisions in letter and spirit. The FRBM Act was amended in 2010-11 and the following targets were set:

  • To maintain revenue surplus in all the years from 2010-11 to 2014-15;
  • To reduce fiscal deficit to 3 per cent of GSDP by 2011-12 and maintain the
  • Same during 2011-15, The amended FRBM set the year-wise target of total debt in relation to the State’s GSDP.

Composition of Revenue

The tax collected by the Government of Arunachal Pradesh constitutes a small portion, less than 5 percent, of the total revenue at its disposal. The rest are share of central tax, the state’s own non-tax revenue, and most important of all, the grant from the Central Government.

From 2001-02 to 2011-12 own tax of the state averaged 3.63 percent of the total revenue. On the other end of the spectrum is the grant from the Central Government, which averaged as high as 84.06 percent of the total revenue. Not only own-tax revenue, but also the share of the central tax is not high, being only 12.31 percent of the total during the eleven-year period from 2001-02 to 2011-12.

Total tax, own and central share, averaged 15.94 percent of the total during 2001-12. Compared with the own tax, the state’s own non-tax is high averaging 11.92 percent of the total revenue during 2001-02.

Revenue and Capital expenditure

The overall expenditure of the Government of Arunachal Pradesh is dominated by what is called ‘consumption; the revenue part of the expenditure varied during 2001-12 from a low of 66.68 percent to a high of 74.62 percent of the total.

The capital expenditure varied between 25.38 percent of the total to 33.32 percent. Table 2. 3 shows the composition of expenditure and its magnitude in the State’s GSDP. The Government expenditure is very high in the state forming more than 50 percent of its GSDP.

The expenditure varied during 2001-12 between 53.82 percent of the GSDP, the lowest value and 74.77 percent, the highest value. The revenue expenditure varied from a low of 39.67 percent of the GSDP in 2011-12 to a high of 50.49 percent of the GSDP in 2008-09. The capital expenditure as the percentage of the GSDP was lowest in 2001-02, only 13.66. This percentage reached the peak during the reference period in 2008-09 when it was 24.28 percent of the GSDP.