Finance minister Harmohinder Singh Chatha, who presented the last budget of the Congress regime, would know better that the revenue expenditure estimated in the budget speech he read out on Friday with discomfiture is estimated at Rs 52,702 crore, higher by Rs 6,479 crore over the budget estimates he presented for 2013-14 fiscal.
In comparison, the revenue receipts in 2014-15 are likely to register an increase of Rs 3,909 crore. Revenue expenditure is operational expenditure that is expensed immediately thereby being matched with revenues of the current accounting period.
The finance minister’s budget address itself contained indicators to the generous spending the state government has embarked upon since November 2013 – the day chief minister Bhupinder Singh Hooda set off on votebank centric please-all mission. “Hike in social security pensions and interim financial relief at the rate of Rs 2,000 per month to all the classes 3 and 4 employees besides a risk allowance at the rate of Rs 5,000 per month to Haryana police constabulary from January 1, 2014...,’’ said Chatha.
The state government had made a provision of Rs 12,259 crore for salaries in 2013-14, which constituted 29.45% of total revenue receipts (TRR). However, the provision for salaries for 2014-15 has been kept at Rs 14,736 crore, which constituted 30.90% of TRR due to grant of interim relief to the Classes 3 and 4 employees and grant of risk allowance to cops.
Power subsidy goes further up
The ever rising rural electrification (RE) subsidy bill, a major drain on the state exchequer, is set to swell further in 2014-15 to Rs 4,495 crore as compared to Rs 4,260 crore in 2013-14.
However, this is not the end of it. The finance department while preparing the budget estimates has not factored-in the liability the state government would have to bear on account of Hooda’s pre poll pacifier for domestic electricity consumers. The financial impact of the reduction in the rates for domestic and agriculture consumers would work out to be about Rs 700-800 crore annually and would have to be borne by the state government from its budgetary resources.
Following in the footsteps of erstwhile Aam Adami Party government in Delhi, the state government recently rolled back the existing rate of power for domestic consumer besides reducing power tariff by 15 paisa per unit (from a mere 25 paisa per unit to 10 paisa per unit) for the much pampered farm sector. The state government has in fact given a double relief to domestic electricity consumers by proposing a zero tariff hike for 2014-15 fiscal coupled with a roll back of current tariff, which comes into effect from January 1, 2014.
Restructuring of debt-ridden power firms
Another additional burden would come in the form of interest payments to be made by the state government on loans for the two debt-ridden power distribution companies.
A provision of Rs 721 crore in 2014-15 estimates has been made for this. As per the scheme of union ministry of power regarding financial restructuring plan (FRP) of state discoms, 50% of the short term liabilities (STL) outstanding as on March 31, 2012 amounting to Rs 7,366 crore in the shape of bonds issued by the distribution companies to the lenders are to be taken over by the state government in a 2-5 years period (from 2012-13 to 2016-17) by issuance of special securities in a phased manner and as per the fiscal space available under the FRBM Act. The state government will provide full support to discoms for repayment of interest and principal for this portion.