Lesser than expected mobilisationof tax revenue has hit Punjab's government's plans of reducing its "widening" revenue deficit which grew by three fold in 2013-14.
In the state budget presented by Finance Minister Parminder Singh Dhindsa here at state Assembly, the revenue deficit - difference between revenue receipts and expenditure of the state - has been projected to grow to Rs 5,259.06 crore for 2013-14 as against the budget estimates of Rs 1,746.56 crore.
As per revised estimates for 2013-14, the revenue deficit as percentage of GSDP would be 1.66 per cent as against projected percentage of 0.57 per cent (Budget Estimates).
"The revenue deficit target was kept very optimistic but the revenue did not grow as much as we had expected. That is why it exceeded budget estimates," Dhindsa told reporters after presenting the Budget.
He was asked by the state government could not keep its revenue deficit low in 2013-14.
The state government had anticipated revenue receipts of Rs 42,665.91 crore including tax revenue of Rs 28,524 crore in 2013-14. But as per revised estimates, the state could mobilise revenue of Rs 39,850.58 crore , about Rs 2,815 crore lesser than the target.
As per budget documents, the state could collect tax revenue of Rs 26,403.60 crore (Revised Estimates) as against target of Rs 28,524 crore for last fiscal. The decline has been witnessed in collection of VAT, excise duty collection from liquor and stamps fee.
On the other hand, the revenue expenditure has also gone up from projected amount of Rs 44,412.47 crore to Rs 45,109.64 crore (Revised Estimates), as per documents.
"During 2012-13, the state mobilised tax revenue of Rs 22,588 crore with growth rate of 19.89 per cent over previous year. For 2013-14, own tax revenue is Rs 24,079 crore wit growth rate of 6.60 per cent. For 2014-15, tax revenue is estimated at Rs 28,480 crore with growth rate of 18.28 per cent," said Dhindsa.
As per fiscal consolidation path fixed by 13th Finance Commission, the state's revenue deficit for 2012-13 and 2013-14 was targeted at 1.2 per cent and 0.6 per cent. In 2012-13, the revenue deficit as percentage of GSDP was 2.60 per cent and for 2013-14, it is 1.66 per cent.
Dhindsa said in his speech that state failed in achieving revenue deficit targets set out by 13th Finance Commission.
Dhindsa said he focused on fiscal consolidation by trying to avoid increase in revenue expenditure but increasing spending on capital expenditure.
"That is why you will not see so many social welfare expenditure in the Budget," he said.