Rajasthan : Main Features of budgets - Jammu&Kashmir PCS Exam Notes

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Rajasthan : Main Features of budgets

The Minister of Finance of Rajasthan, Ms. Vasundhara Raje, presented the Budget for Rajasthan for the financial year 2016-17 on March 8, 2016.

The Gross State Domestic Product of Rajasthan for 2016-17 is estimated to be Rs 7,67,167 crore. This is 13.8% higher than the estimates for 2015-16.

Total expenditure for 2016-17 is estimated to be Rs 1,71,261 crore, a 5% decrease over the revised estimates of 2015-16. In 2015-16, there was an increase of Rs 42,707 crore (31%) in the revised estimates over the budget estimates.

Total receipts (excluding borrowings) for 2016-17 are estimated to be 14% higher, at Rs 1,23,393 crore. In 2015-16, total receipts fell short of the budgeted target by Rs 4,033 crore.

Revenue deficit for the next financial year is targeted at Rs 8,802 crore, or 1.14% of the Gross State Domestic Product (GSDP). Fiscal deficit is targeted at Rs 43,147 crore (5.62% of GSDP). Primary deficit is targeted at Rs 25,621 crore (3.3% of GSDP).

Allocations for the Departments of Energy and Welfare of Scheduled Caste members have increased by 64.9% and 67.4% respectively, in 2016-17. The Department of Health, on the other hand, has a 0.3% decrease.

Energy: Rs 20,133 crore of electricity distribution companies’ debt is proposed to be taken over by the state government in 2016-17, under the UDAY scheme. In 2015-16, this amount was Rs 42,964 crore.

40,000 new agricultural electrical connections are proposed to be set up in 2016-17.

Road Transport: The renewal of 2,500 km of non-patchable roads is proposed to be taken up in 2016-17, with an allocation of Rs 600 crore.

Rural Development: 60,000 artisans are proposed to be trained in 2016-17 under the Rural Non-Farm Development Agency, with an allocation of Rs 2 crore.

Tax Proposals

Value Added Tax (VAT): VAT on cigarettes has been proposed to be increased by 15% on top of current rates. VAT on aerated drinks increased from 15% to 20%.
Exemption of electricity duty: 100% exemption of electricity duty for enterprises setup in backward regions of the state has been proposed in 2016-17.

Deficits, Debts and FRBM Targets for 2016-17

The Rajasthan Fiscal Responsibility and Budget Management (FRBM) Act, 2005 provides annual targets to progressively reduce the outstanding public debt, revenue deficit and fiscal deficit of the state government.

Revenue deficit: It is the excess of revenue expenditure over revenue receipts. A revenue deficit implies that the government needs to borrow for expenses which do not create assets. The government has estimated a revenue deficit of Rs 8,802 crore in 2016-17. This is driven by: i) increased interest payment obligations, and ii) grants provided to electricity distribution companies (DISCOMS), both under the UDAY scheme.

In 2015-16, the government had estimated a revenue surplus of Rs 557 crore. However, the revised estimate shows a deficit of Rs 5,232 crore. The increase in deficit is on account of the reduced revenue collection on the government’s tax sources and royalties and fees on Petroleum production.

Fiscal deficit: It is the excess of total expenditure over total receipts. This gap is filled by borrowings by the government, and leads to an increase in total liabilities of the government. The government had projected a fiscal deficit of 2.99% of GDP in 2015-16, which increased to 9.99% in the revised estimates of 2015-16 and is estimated to decline to 5.62% in 2016-17. The increase in fiscal deficit is on account of the government taking over the debt of DISCOMS under the UDAY scheme.

Outstanding Liabilities: It is the accumulation of borrowings over the years. In 2016-17, the outstanding public debt is expected at 33.2% of the state GDP. According to revised estimates of 2015-16, the outstanding public debt is expected to be 31.3% of the state GDP, which is higher than the budget estimates of 24.3%

Budget Estimates for 2016-17

The total expenditure in 2016-17 is targeted at Rs 1,71,261 crore. The revised estimates for the total expenditure in 2015-16 was Rs 1,80,420 crore, which is 31% (Rs 42,707 crore) more than the budgeted target of 2015-16.

The expenditure in 2016-17 is proposed to be met through receipts (other than borrowings) of Rs 1,23,393 crore and borrowings of Rs 47,947 crore. Total receipts for 2016-17 (other than borrowings) are expected to be 14% higher than the revised estimate of 2015-16.

Receipts in 2016-17

The total revenue receipts for 2016-17 are estimated to be Rs 1,23,251 crore, an increase of 15.4% over the revised estimates of 2015-16. The tax to GSDP ratio is targeted at 6.94% in 2016-17, which is higher than the revised estimates of 6.77% in 2015-16. The increase in the tax to GDP ratio implies that tax collection grew at a higher rate than the economy itself.

Tax revenue is expected to increase by 16.7% (Rs 7,630 crore) in 2016-17 over the revised estimates of 2015-16. Non-tax revenue is estimated to increase by 18.6% (Rs 2,212 crore).

Grants from the centre are expected to increase by 14.3%, from Rs 21,333 crore in 2015-16, to Rs 24,389 crore in 2016-17. State’s share in central taxes, is estimated to increase by 12.7%, to Rs 31,478 crore in 2016-17.

Some other Highlights

No change in VAT except 15% increase on tobacco products.
Internet service providers will be exempted from paying entertainment tax on online booking of movie tickets.
Recommendations of seventh pay commission to be implemented in the state.
Home department to get Rs 5,600 crore which is 11.80% more than the previous year.
Block headquarters will be connected with fibre, eight lakh people will be given IT training in 2017-18.
158.63 crore allocated for art, culture and archaeology department which is 49.42% more than the Revised Estimates of 2016-17.
Rs 36 crore allocated for basic infra, conservation, beautification and renovation works at various tourist places in state.
2 crore allocated for 25 lac bigger plants, provision of Rs. 3 crore for development of 5 Smriti Van.
10.90 crore to be allocated for conservation of wood fossils, display and development of infra facilities for tourism at Aakal Wood Fossil Park.
Eco-tourism to be developed at Trevor’s Tank at Mount Abu, Rs. 7 crore to be allocated for Project Leopard.
190 cities will get WiFi facilities in next financial year.
Villages with population of more than 5,000 will be developed as smart villages.
Rs 100 crore allocated to establish district hospital in Dholpur.
14 districts in Rajasthan will get new screening facilities for breast cancer, Rs 3.36 crore allotted for this.
Rs 1,399 crore allotted for higher education in the budget, Karauli and Bharatpur will get new engineering colleges.
Admission in government schools to be increased by 32%, smart labs will be set up in schools.
Self defense training will be provided to 3 lakh 60 thousand girls in state schools.
New sports policy will be released, Bharatpur district to get wrestling academy; Volleyball academy will be established in Jhunjhunu.
Rs 5986 allocated for social justice department in the budget.
Economical weaker students from the General Category who get admissions in medical colleges, IITs and NLUs will get Rs 25,000. Those selected for administrative services will get Rs 50,000.
Rajasthan Budget 2017 makes provision for 1,000 women milk societies in the state.
One lakh farmers will get soil health cards, announces Vasundhara Raje in her third Rajasthan Budget 2017 speech.
Rs 88 crore allocated to promote tourism as Rajasthan witnessed 17.31 % increase in the number of tourists in 2016-17. Rs 36 crore to be spent in developing tourists facilities.

Entrepreneur centers to be set up at Vardhaman University and Jai Narayan Vyas University.

Vasundhara Raje said 2039 villages will have drinking water facility. Safe drinking water to reach 41,00,000 people. Over 1480 Reverse Osmosis plants will be installed in the villages.

One lakh new rural electricity connections will be provided to the farmers.

Budget allocates nearly Rs 16 crore for maintenance of air strips in the state.

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