Haryana sales tax loss: Rs 900 cr

Haryana Finance Minister Birender Singh will present his second budget in Haryana Vidhan Sabha in the second week of March.

In an interview with Business Standard, Singh said the state has an annual plan outlay of Rs 3,300 crore for 2006-07 that is 11 per cent higher than the last year.

But at the same time the state is going to lose Rs 900 crore in 2006-07 on account of reduction of CST (central sales tax) from 4 per cent to 2 per cent. He divulged that the CST would be slashed to 1 per cent and, subsequently, abolished in next two years.

He poined out that Haryana was pioneer in implementing VAT (value added tax) in the country. There has an increase of about 18 per cent in the revenue receipts as a result of VAT in 2005-06.

"But it will give the optimum results when implemented uniformly. Since Rajastahn and Uttar Perdesh have not implemented it, Haryana is losing revenue", said the minister.

He told Business Standard that in the forthcoming budget one of his thrust areas would be education and he has earmarked 27 per cent of the total budget expenditure for education.

"This becomes imperative as the state has an alarmingly low sex ratio. New schemes would be launched for the education of girl child to encourage parents to have female child", told Singh.

He added that the state is grappling with the acute power shortage. So he was keen to invite private players to supplement the efforts of the government to increase the power supply.

A 600 MW project in Yamuna Nagar and a 1000 MW project at Faridabad have already been sanctioned. Two more projects with the total capacity of 2,200 MW at Jhajjar and Hisar are in the pipeline. The negotiations are on with Tata, Reliance and Jindal Power, said Singh. These would be gas based power plants as the project would have a shorter gestation period. He indicated that GAIL or Reliance might source gas for the projects.

The finance minister would also earmark substantial funds for the development of infrastructure as it is a must to woo the proposed FDI (foreign direct investment).

The state registered a growth rate of about 8.5 per cent in 2005-06 and aims to retain the same in the forthcoming zero deficit budget of B S Hooda government.