Narendra Modi surprises, opts for Rs 40,000 crore vote-on-account, 'Modified' budget awaits post Lok Sabha elections 'windfall'

Written by Avinash Nair | Gandhinagar | Updated: Feb 22 2014, 01:21am hrs
Narendra ModiGujarat Chief Minister and BJP's PM candidate Narendra Modi during inauguration of five-day long handicraft exhibition in Ahmedabad on Friday. PTI
Awaiting a cue from the new government that will assume power after the Lok Sabha elections, the Narendra Modi-government in Gujarat on Friday chose to present a vote-on-account budget, with an interim plan allocation of Rs 40,000 crore for the first four months of the next fiscal 2014-15, on Friday.

"The Union government has decided to present a vote-on-account for the financial year 2014-15 and therefore it is appropriate that the polices of the state governments are also in line with the approach and direction to be taken by the Government that is formed at the Centre. We have therefore decided to present and seek a vote-on-account for the period from April 1 to July 31, 2014 for the state, to enable us to plan in a sustainable manner," said Nitin Patel, the state finance minister while presenting an interim budget in the Gujarat Legislative Assembly, in presence of Gujarat chief minister and BJP's Prime Ministerial candidate Narendra Modi.

"Sufficient time is not there to think over the demands of this year," Patel remarked adding that a "Modified budget" will be presented at a later date incorporating new initiatives under Plan and non-plan sections of the budget for Gujarat.

With elections round the corner, the Gujarat government has not only refrained from imposing any fresh taxes or levies in the interim budget, but also choose not to provide any relief or sops to the people of the state. The interim budget also carries no mention of any new schemes or services.

Patel later told mediapersons that many state governments choose to present a vote-on-account budget during an election year.

"We have not introduced any new taxes since last several years. In spite of this, the state government has been able to implement development activities in the state without any hiccup," Patel told mediapersons later pointing out how the development expenditure for the upcoming fiscal has gone up to Rs 80,974 crore, which is more than double the non-developmental expenditure of Rs 37,627 crore.

When asked why the state government has not taken any steps to rein in the price rise that is affecting the common man, Patel said, "Keeping a tab on price-rise and inflation is Government of India's responsibility."

The total budget estimate presented in the state assembly for the entire financial year 2014-15 is Rs 1,20,390 crore which is a five percent more than the budget size of 2013-14. The total budget shows a revenue surplus of Rs 7,697 crore, while the fiscal deficit, estimated to be around Rs 17,611 crore, works out to 1.93 percent of the GSDP (Gross State Domestic Product), far below the permissible FRBM (Fiscal Responsibility and Budget Management) limit of three percent. The GSDP of Gujarat (at current prices) stands at Rs 6,70,016 crore for the year 2012-13.

The public debt of the Gujarat government that currently stands at Rs 1.38 lakh crore is expected to increase to 1.53 lakh crore with the net addition of Rs 15,000 crore in 2013-14.

"The advance estimates for 2013-14 show improvement in public debt to GSDP ratio by 0.5 percent. Fiscal deficit to GSDP ratio improved by 0.47 percent than budget estimates for 2013-14 which is mainly on account of healthy revenue surplus. This indicates significant improvement in state finances and full adherence to the FRBM norms," stated a release from the state government.