Fiscal deficit comes down

Mumbai, March 21 | Updated: Mar 22 2006, 05:30am hrs
Even as Maharashtras overall debt is expected to reach at Rs 1.06 lakh crore (25.5% of gross state domestic product) in 2005-06, the government has succeeded in reducing the fiscal deficit to 2.1% from previous years 3.7%. The interest payments-revenue receipts percentage ratio is expected to come down to 18.9% in 2005-06 from 20.7% in 2004-05.

The state economic survey for 2005-06 has acknowledged the governments efforts to turnaround the economy and said that implementation of Fiscal Responsibility Bill, value added tax, monthly cash flow system and curtailment in administrative expenditure would bear fruits of healthy financial condition. The survey projected that heavy rains in July last year may have adverse impact on the state finances.

The survey said the expeditious monitoring of fiscal responsibility legislation and institutional reforms hold the key for fiscal correction. During April-December 2005 the tax revenue has increased by 20.6%, the non tax revenue by 41.9% and the total revenue receipts by 23.7% than previous year. The states own tax revenue rose by 15.2%, in which the sales tax revenue increased by 11.4%, stamps & registration fees by 26.6%, state excise duties by 37.9%, electricity duties by 33.1% and the land revenue by 57.5% than such receipts in the corresponding period of the previous year.

The governments success in containing non-Plan expenditure is another main reason for improvement in revenue balances. The percentage of expenditure on salaries and pension payments to revenue receipts is expected to be 48.1% in 2005-06.

As per the 12th Finance Commission report, Maharahstras share in central taxes is fixed at Rs 4,997 crore for 2006-10. In addition to this, during the same period, the state would also get grants-in-aid of Rs 5,531.06 crore.