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Presenting his ninth consecutive budget since 2005-06, Modi, who also holds the finance portfolio, said the state's total expenditure for 2013-14 had been fixed at Rs 92,088 crore.
The estimated revenue surplus of Rs 6,809 crore was the salient feature of the Budget as the fund could be used for undertaking new development projects, Modi said. The fiscal deficit is estimated to be at Rs 8,769 crore, or 2.79 per cent of the gross state domestic product (GSDP). Under the Fiscal Responsibility and Budget Management (FRBM) Act, states have been asked to keep their fiscal deficit under three per cent of GSDP.
The state government has proposed to make borrowings of Rs 1,819 crore from various financial institutions to meet the expenditure requirement.
The deputy chief minister warned that Bihar is not insulated from the effects of the ongoing economic slowdown. "Bihar cannot remain unaffected by the general slowdown, which has entangled country's economy. The sale of vehicles and petroleum products is heading south. Our share in central taxes is also expected to take a dip."
India’s GDP is forecast to grow at five per cent this financial year, the lowest in a decade.
Modi, however, added that Bihar would grow faster than the national average. “We are still growing very fast. In this fiscal, we expect a growth rate of 9.5 percent, which is almost double of the national average. We still have revenue surplus of more than Rs 6,800 crore, which will help us in further development," he added.
The state’s outstanding public debt has been estimated at Rs 65,838 crore in 2013-14, which is 20.96 per cent of GSDP. This, according to Modi, is an indicator of Bihar's healthy financial condition as several states have been deeply burdened with growing public debt over the years.
The education, road and health sectors got the lion's share of the funds under the proposed expenditure for the next year at Rs 18,281 crore, Rs 3,357 crore and Rs 7,208 crore, respectively, higher by 10-20 per cent in comparison to last year.
The government, however, proposed hike in tax rates for commercial vehicles. Tractors, trailers, two-wheelers, cars, autos and buses will now cost more in the state. "We have tried to tune our road tax rates with prevailing tax rates in neighbouring states. We still charge less in comparison to them," Modi said.
The minister has proposed to increase tax on cigarettes from the present 20 per cent to 30 per cent to deter the consumers in view of health hazards. Taxes on tobacco used for making bidi would be 13.5 per cent. Taxes on products like transmission tower, transformer and UPS has been raised from five to 13.5 per cent, while entry tax has been levied on other products like furniture, lift, elevator and battery.
In a minor relief to the consumers, the state government has exempted tax on goods like non-incense agarbattis, coconut (in view of its religious value), kurthi (a pulse variety), peanut and rajma.
The state government has sought to make liquor and other brew dearer by proposing surcharge on it, Modi said.
The state government also announced taxes ranging from 14 per cent to 27 per cent on various categories of vehicles like tractors, trailors, three-wheelers, taxies/cabs, buses of different seating capacity as such revision has not taken place for 19 years.
Modi, however, disagreed that tax hike on commerical vehicles will make transportation a costly affair in any significant manner.
The deputy chief minister announced a number of development schemes, mostly related to agriculture, irrigation and education sectors. With an aim to provide farming technique and related information to the farmers, the government announced 100 per cent hike in the honorarium to the farm advisers (krishi salahkars) from Rs 2,500 to Rs 5,000 and decided to continue with one per cent subsidy on farm loan upto Rs 3 lakh.
