Reading out the budget speech for 2016-17, Haryana finance minister Capt Abhimanyu on Monday announced no new taxes in the budget estimates and listed out a slew of small-time tax exemptions.
Behind his tax cuts lay a spiralling revenue deficit of over Rs 12,000 crore (as per 2016-17 budget estimates), higher by over 14 % as compared to the 2015-16 revenue deficit of about Rs 10,000 crore. The finance minister, however, was quick to put the blame for the increase in revenue deficit on account of taking over of 75 % outstanding debt of state’s two power distribution companies under Ujwal DISCOMs Assurance Yojana (UDAY).
“The 2016-17 budgetary estimates have been substantially impacted by this singular decision. The state government has decided to take over debt of `25,950 crore in two tranches in 2015-16 and 2016-17 under UDAY,’’ the state finance minister said. Later, at a briefing, the FM said the debt liability in power sector was an inheritance of the previous Congress regime but taking over the liability was a wise decision of the BJP government.
Another downside is the increase in debt liability from about Rs 1,14,000 crore to about Rs 1,40,000 crore which includes the impact of debt liability takeover under UDAY.
However, where the Finance Minister has reasons to feel pleased is the increase in revenue receipts and capital expenditure. “The revenue receipts for 2015-16 are expected to be Rs 54,167 crore while the revenue receipts for 2016-17 are projected at Rs 62,955 crore. The total revenue receipts as ratio of GSDP is projected at 10.7 % in 2016-17,’’he said
The FM said he proposed to increase the capital investment to Rs 8,788 crore in 2016-17 (excluding UDAY), an increase of 29.8 % over 2015-16 revised estimates. He was upbeat over the 15.4% growth in the 2016-17 budgetary estimates as compared to 2015-16. The increase is after discounting the financial takeover of 75 % of the accumulated debt of power distribution companies.