In a smart act of fiscal jugglery, Madhya Pradesh finance minister Raghavji gave from one hand and took from the other. His little sops for the common people -- like reducing entry tax on cooking gas or slashing the prices of namkeen -- would be more than covered by the 5% VAT (value-added tax) on purchase of liquor and purchase tax on procurement of paddy.
The size of the budget touched R1, 02, 447 lakh crore, making it the biggest in the states’ history.
While presenting the state budget for the fiscal 2013-14, the finance minister has been so calculative in offering sops and finding means to make up for the consequent loss of revenue that he actually ended up saying: "Tax relief proposed in the budget would lead to revenue loss of R170 crore, but extra tax imposed would accrue as much revenue."
Raghavji reiterated the chief minister’s oft-repeated promise of 24 hour power supply to all villages and allocated R3,000 crore to that end.
Other than the gas cylinder, which shall now cost R20 less, there is nothing much for common consumers to rejoice - unless you are addicted to namkeen or candies, or suffer from breathing problems ( oxygen cylinder is cheaper). To the dismay of industry, there was no VAT relief on diesel either.
Raghavji's tenth budget ensures a steady flow of additional revenue to the government coffers from sale of liquor and purchase tax on paddy procurement. However, the purchase tax would not be borne by the farmer but by the procuring agency, Food Corporation of India (FCI) - a politically deft manoeuvre in an election year.
Presenting a rosy picture of the state’s economy in an election year, Raghavji said gross domestic product of the state has risen four-fold in the past one decade and per capita income three-fold. Rate of average economic growth has also been about 10%, he added.
This is the first time that the size of the state budget has gone beyond Rs. one lakh crore mark, he said in his speech. The budget is again revenue surplus with revenue expenditure during the fiscal expected to be Rs. 65,208 crore as against revenue receipts of Rs. 71,728 crore.
Fiscal deficit this year is likely to be Rs. 10,435 crore, which is only 2.9% of the gross domestic product.
In view of the rising crime graph in the state and its damning assessments by the National Crime records Bureau, law and order has seen an increased allocation of 37%.
Women and child development, another critical area where the state is lagging behind, also saw an allocation hike of 26%.
The other sectors like agriculture, education, health, roads, energy and urban development have all been doled out an average of 10-15% increased outlays.
Calling the budget one of “development and prosperity,” chief minister Shivraj Singh Chouhan said it would lead to MP becoming a “developed state”.Industry, however, had a mixed reaction.
Welcoming the overall provisions of the budget, industrial bodies expressed disappointment over non-fulfillment of demand like reduction of VAT on petrol and diesel, reducing entry tax on sugar and VAT on edible oil.