Haryana finance minister Ajay Singh Yadav presented his first Budget in the Assembly for fiscal 2010-11 focusing mainly on development of infrastructure under PPP mode and raising additional revenue from various sources. He shares his vision for the state in an interaction with FE?s Preeti Parashar. Excerpts:-

The planned annual outlay for FY 2010-11 is around Rs 10,500 crore. Do you think you could have allocated more funds to it?

The total expenditure under the Budget estimates 2010-11 is projected at Rs 33,600 crore. I could have increased the planned annual outlay as well but due to the burden of Rs 2,600 crore towards pay revision on account of Sixth Pay Commission and pay and pension arrears of Rs 1,570 crore, totaling Rs 4,120 crore, more funds could not be allocated towards it. But after including an outlay of Rs 1,363.58 crore for the centrally-sponsored and development plan schemes the composite plan outlay comes to around Rs 11,863.59 crore showing a growth of 3.5% over last year.

The average growth in plan expenditure during 2005-10 is 37.83%, while the average growth during 2000-2005 was only 4.80%. We are expected to get extra incentive of about Rs 400 crore from the Centre. This year the state will suffer a loss of about Rs 300 crore due to complete ban on mining and around Rs 1,570 crore will go into remaining 30% arrears of the Sixth Pay Commission.

A revenue deficit of Rs 3,942 crore has been projected for 2010-11 in the Budget. How are you going to reduce it?

The fiscal deficit is estimated to be 3.59% of GSDP in 2010-11 which is within the prescribed limit of 4%. We will try to reduce it through measures like increase in value added tax (VAT) from 4-5% on certain items, reducing unfruitful expenditure, limited upgradation of posts in the state, minimum purchase of furniture, travel by economy and various other measures to keep the fiscal deficit well within the prescribed limit.

What is your plan for additional revenue generation?

Besides increasing the VAT from 4-5% which will generate about Rs 250 crore annually, we have imposed a surcharge of 5% on VAT on items like petroleum, food items, electrical appliances and sanitary fittings etc. This is expected to raise about Rs 300 crore per annum. We are also promoting public private partnership for better infrastructure development. Haryana Infrastructure Development Board will be set up to provide an institutional framework for conceptualising, financing, implementing and maintenance and operation of PPP projects. This will attract more industry and generate better employ ment opportunities. We are also demanding re-imbursement from the Centre for implementation of the Sixth Pay Commission. A stimulus package of Rs 713.79 crore will be given.

What is the growth target of the state in FY 2010-11?

The state?s annual growth is pegged at 7-7.5% by the end of the current fiscal. Next year we are planning to increase it to 8%. This year so far the state has witnessed a rise of about 50% in excise and 12-13% in VAT collections. But we faced a loss of about Rs 300 crore on account of lower stamp duty collections. The power subsidy has also increased to Rs 2,900 crore this year. We have to make conscious efforts to reduce the line losses as our focus will be to reduce the unfruitful expenditure in every possible way.

Why is Haryana opposing the inclusion of purchase tax in the Goods and Services Tax?

The state will suffer losses of upto Rs 600-700 crore once this is done. Purchase tax is a major revenue churner. If the purchase tax is to be subsumed in the GST, we should be given compensation equivalent to loss suffered.