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State Budgets 2002-03 <br>Kerala on comeback trail
Kerala, which is on the verge of financial bankruptcy, is in the process of setting its house in order. External aid, a crucial aspect of this exercise, has, however, become a subject of controversy in the state. The state government is planning to borrow Rs 3,000 crore from Asian Development Bank during the period 2002-04 for financial restructuring, of which Rs 500 crore is expected to come in the near future. Kerala is expected borrow another Rs 240 crore from the World Bank. There is every possibility that ADB will double its quantum of assistance to the state. All these loans would be routed through the Central government. The ADB package comes with certain conditions that mainly involve streamlining administration, ensuring accountability and transparency, and reducing or eliminating deficits and subsidies. The state government shortly plans to introduce Fiscal Accountability Bill.
Despite proposal to raise additional resources of Rs 283.5 crore, the Kerala Budget for 2002-03 is showing a deficit of Rs 273.42 crore. This is mainly due to a carry-over deficit of Rs 649 crore. State Finance Minister K. Sankaranarayanan has decided to persist with additional sales tax of 15 per cent for one more year, which is likely to rake in Rs 225 crore. The government has introduced entry tax for petroleum products, thereby, making products of refineries of other states costlier in Kerala. The state budget contains no new projects worth mentioning as the finance minister has given more emphasis on bringing the state back on track before going ahead with any major new projects.
HP lays stress on infrastructure
The Himachal Pradesh budget for 2002-03 has emphasised on modernising the agricultural base, providing rural infrastructure and strengthening Panchayat Raj institutions by vesting them with more powers. The government is planning to set up two food processing units in the joint sector in the near future. The power sector is being considered as another thrust area with the government planning to add 7,000 mw hydel power generation capacity in the next 8-10 years. A new corporation called Upper Satluj Valley Corporation would be constituted in the joint sector. This corporation would take up the Rampur Hydel (400 mw), Karchham Shongtong (225 mw) and Thopan Pawari (400 mw) projects.
Orissa cuts Plan expenditure
Orissa Finance Minister Ram Krushna Patnaik has preferred to carry forward a deficit of Rs 603.52 crore rather than impose any fresh taxes in his latest budget. State finances are in shambles and salary and pension are eating up nearly 60 per cent of the plan outlay. The finance minister has transferred Rs 785.15 crore meant for plan expenditure to non-plan head.
Zero base budgeting has been introduced for the first time in the state. The budget envisages a plan outlay of Rs 3,100 crore. However, more than one-third of the plan outlay is covered by externally aided projects. The Rural Infrastructure Development Fund, sponsored by NABARD, would fund Rs 221 crore of these projects. Interestingly, the plan outlay for 2001-02 was fixed at Rs 3,000 crore, which later had to be slashed by Rs 700 crore due to paucity of funds.
West Bengal moots decentralisation
The Government of West Bengal has given more importance to employment generation, land reforms and decentralisation plan implementation in Budget 2002-03. The state plans to create 7 lakh new employment in the current financial year. At the same time the government has decided against cutting down existing jobs and would create new posts wherever necessary. The government is also against disinvesting its stake in any of the state PSUs; instead, it would concentrate on improving their efficiency and turn loss-making units into profitable ones. Subsidy will not be curtailed though a cap on hike in subsidy may be considered in future.
The plan outlay for the power sector has been increased from Rs 1,098.5 crore in 2001-02 to Rs 1,291.9 crore in 2002-03. Also, an additional sum of Rs 100 crore, based on NABARD projects, has been earmarked for rural electrification. The allocation for road sector has been increased, albeit nominally, from Rs 928.7 crore to Rs 933.8 crore. Special importance would be given to improving the quality of roads and in future only reputed agencies would be contracted for major road projects with the condition that these roads would require no repairs for the next three years.
For more details please refer to Projectmonitor Prinit Version.
(1/4/02)
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