Fiscal prudence to be special focus of U'khand budget

Ahead of the budget session of the state Assembly, the Uttarakhand cabinet today held a meeting to give its approval for presentation of the state budget in the Assembly.

The budget session of the Assembly is beginning here on March 8. The cabinet meeting, which was presided over by Chief Minister Ramesh Pokhrial Nishank, also cleared a number of other proposals including the address of Governor Margret Alva in the Assembly.

Since the budget session has already been convened, no official briefing was held, an official spokesman said.

The main focus of this year’s budget for the year 2010-11 would be on fiscal prudence and controlling market borrowings. The fiscal and revenue deficits had shot up considerably in the last year’s budget owing to the heavy increase in the non-plan expenditures. “We are mainly focusing on the fiscal correction path laid down in the Fiscal Responsibility and Budget Management (FRBM) Act,” a top official said. The fiscal deficit has to be below 3.5 per cent of the Gross State Domestic Product (GSDP) under the FRBM Act.

Last year, the fiscal deficit had shot up to Rs 2,070.99 crore and revenue deficit was Rs 213.44 crore. “This time, we may see a revenue surplus budget,” said the official.

But there is bit relief this time as the financial burden of the 6th Pay Commission is gradually coming down. “We don’t have to pay any more arrears,” said the official.

Like in previous years, the government is not likely to impose any fresh taxes. Since the government has already imposed surcharge on VAT during the weekend, there may not be any more fresh taxes, the official added. On the other hand, the pressure is mounting on the government to rollback the .5-1 percent surcharge on various FMCG and day-to-day basis food items in the budget. Local business community is up in arms against the government over the issue. Meanwhile, president of the Industries Association of Uttarakhand (IAU), a premier organisation of SMEs, Pankaj Gupta has asked the government to check its wasteful expenditures.