Government of Mizoram
Budget Speech: 1993-94
By Pu J.Lalsangzuala
Finance Minister
Mr. Speaker
Sir, I now rise, with your permission, to present
the Mizoram Budget for the Financial year 1993-1994.
2. During the last year and a half, the Country has
witnessed perhaps the most dramatic changes on the economic front
in the post-independence era. The process of economic reforms with
twin pillars of liberalization and globalisation, initiated in June
1991, made substantial progress. The considerable advance made in
bringing about fiscal correction is reflected in deceleration in inflation
in the course of the year. The rate of inflation declined from 17
percent in August, 1991 to mere 7 percent of Gross Domestic Product
in 1990-1991 was brought down to 5 percent only in 1992-1993. Further,
the growth of GDP is expected to exceed 4 percent in 1992-1993 as
against 1.2 percent only in 1991-1992. But there is no cause for complacency.
A great deal remains to be done. However, this task cannot be accomplished
by the Centre alone. The Economic Survey presented in the Parliament
sometime back has implored the State Governments to supplement the
Centre’s efforts by reducing their budgetary deficits. An expert scrutiny
of State’s fiscal policy has also been recommended in the Survey.
3. It is with this in the background that I have
framed my Budget. Drawing lessons from the changes in the national
scene, we have to do our mite so as to gradually reduce our heavy
dependence on the Central support. The need of the hour is self-improvement
by refashioning our methods of functioning and mode of thinking. I,
as Finance Minister, have quite a thankless job while translating
these in practice. I hope the Hon’ble Members would appreciate the
unavailable position I am placed in and while evaluating my Budget
in this light extend their full co-operation. The only alternative
to fiscal discipline is fiscal disaster and we must do our best to
avert the same.
PLAN EXPENDITURE:
4. The size of the Eight Five year Plan (1992-1993)
of Mizoram has been fixed at Rs. 763.00 crores. This is about treble
of the original size (Rs. 260.00 crores) and more than double of the
expenditure of rs. 370.00 crores incurred on State’s Seventh Plan
(1985-1990). For the first year of the Eight Plan (1992-1993), the
size of the State’s Annual Plan was fixed at Rs. 166.00 crores, including
additional Rs. 5.00 crores for Serlui ‘B’ Project and Rs. 1.00 crore
for restoration of landslide damages at Hlimen. We also expect to
get loans of Rs. 10.00 crores in the current year from Power Finance
Corporation to accelerate tempo of some projects. On present indications,
our performance may be more or less in the neighbourhood of the targeted
allocations.
5. For the next year (1993-1994), an outlay of Rs.
185.00 crores has been approved by the Planning Commission for the
State’s Annual Plan. The Centre has undertaken to provide an assistance
of rs. 174.48 crores for this Plan. The balance of rs. 10.52 crores
is assigened for State’s own contribution including Rs. 5.00 crores
by way of market loan. It is for the first time that Planning Commission
has allowed the State Govt. to tap this instrument of Plan funding.
This marks another step towards our joining the mainstream with other
states.
6. In our Plan for the next year, Agriculture and
allied sector continue to get the top-most priority with about one-third
of the Outlay allocated to it. New Land Use Policy with an outlay
of Rs. 27.73 crores occupies the prime of place. A special provision
of Rs. 3.00 crores has been made for strengthening of Mizoram Agricultural
Marketing Corporation. The Sectors of Power & Communications have
been accorded the second and third priorities with allocations of
Rs. 28.21 crores and Rs. 23.97 respectively, the Serlui ‘B’ Hydel
Project in which Rs. 5.00 crores is expected to be spent in the current
yuear would have a fdurther allocation of Rs. 5.00 crores in 1993-1994.
Social Services havee been given high priority. Both Education and
Water Supply and Sanitation have been allotted over Rs. 13.00 crores
each. The distributions system of Lunglei Water Supply Schemes is
proposed to be completed. An allocation of Rs. 7.00 crores has been
made for the District Councils.
7. Apart from the outlay of Rs. 185.00 crores on
the State Plan. A provision of Rs. 7.85 crores has been made for NEC
Schemes. It is also proposed to incur an additional expenditurae of
Rs. 3.28 crores for acceleration of progress of selected power schemes
to be funded by loans from Power Finance Commission. As regards Centrally
Sponsored Schemes, only token provisions have been made in the absence
of clear indications available at present from the various sponsoring
agencies.
8. A booklet highlighting the performance in 1992-1993
and programmes for 1993-1994 of various departments have been circulated
separately along with the Budget documents. I do not, therefore, propose
to touch upon the same here.
RANGAJAJAN COMMITTEE:
9. At the instance of NDC, the Planning Commission
had constituted in April 1991 an Expert Committee to suggest durable
solutions to the financial problems of the Special Category States,
under the Chairmanship of Dr. C. Rangarajan, former Member of the
Commission. The most important financial problems being faced by us
and most of the other Special Category States related to the existence
of Non-Plan gaps resulting in frequent overdrafts with the Reserve
Bank. The problem emanated from the cessation by the Planning Commission
from 1989-1990 of the practice of taking into account the Non-Plan
gap also while fixing the level of Central Assistance for the Plan
and the unrealistic assessment of our requirements by the Ninth Finance
Commission. Even the most legitimate committed liability in respect
of Seventh Plan Schemes was not funded by that Commission.
10. The Committee which submitted its report in August
last year is stated to have made the following recommendations:
(a) the committed liability in respect of Seventh
Plan may be treated as Plan expenditure in 1992-1993;
(b) upto 20 p.c. of the Plan assistance in 1992-1993
may be diverted towards covering the Non-Plan gap;
(c) upto 10 p.c. of the Plan assistance in 1992-1993
may be given additional to meet Non-Plan gap, in six monthly installments
from October 1992 onwards, on the condition that the State had no
overdraft even on a single day in the month preceding; and
(d) the servicing liability due in 1992-1993 on account
of the U.T. period loans may be written off.
11. We had been looking at the outcome of this Committee’s
deliberations with great hope. However, with due regard to the Committee,
I would submit that its recommendations were most disappointing, Sir,
if you allow me, I would venture to go to the extent to say that the
Committee has failed to fulfill the job assigned to it. They have
not suggested any durable solution to our problems as required of
them. All the four recommendations pertain to the current year and
even for this year, much of the relief is illusory. For example, as
the Hon’ble Members know, because of paucity of resources, our seventh
Plan committed liability was not transferred to Non-Plan account.
It is already on Plan account. The second recommendation of the Committee
also does not help us, as this would result in cutting the size of
our Plan, which in any case was not practical.
12. The most surprising was the condition of ‘no
overdraft; attached to the release of additional assistance. The assistance
was designed to relieve the State of overdraft and the absence of
overdraft itself has been made a pre-condition for its release. It
is most unfair and unjust. We are fighting for the waiver of this
condition all-together.
13. I had in my last speech expressed hope, on the
basis of what transpired at the Annual Plan meetings with Planning
Commission, for write off of U.T. period loans. Sir, I am sorry to
say that the Rangarajan Committee has disillusioned us totally. The
relief afforded by it is paltry sum of Rs. 51.00 crores. We are not
at all in a position to meet this liability and have decided to continue
our efforts, and more vigorously, for the total waiver of U.T. period
loans.
REVISED ESTIMATES FOR 1992-1993:
14. In my speech last year, I had stated that the
year 1991-1992 was expected to close with an overall deficit of Rs.
20.92 crores. However, according to the Reserve Bank’s account, the
actual deficit was somewhat larger at Rs. 23.90 crores. This deterioration
was mainly because of less receipt by way of Central assistance to
the extent of Rs. 2.34 crores. We expect to get bulk of the cut restored
on furnishing requisite data on the actual expendituare incurred on
certain earmarked schemes.
15. The Budget Estimates for 1992-1993 presented
by me last year revealed on overall surplus of rs. 7.94 crores. The
surplus is now estimated at Rs. 3.39 crores. This is mainly the net
result of increased in Non-Plan expenditurae resulting from the sanction
of two installments of D.A. effective from 1.1.1992 and 1.7.1992 involving
a net liability of over Rs. 8 crores counter-balanced by additional
assistance of Rs. 5 crores under the recommendations of Rangarajan
Committee. No provison for increases in D.A. was made in the Budget
as mentioned in my last year’s speech. While on this subject, I must
thank our employees for the sacrifice made through impounding of additional
dearness allowances arrears amounting to about Rs. 5 crores.
16. On the basis of the Revised Estimates for the
current year, the yar is likely to close with a deficit of rs. 20.51
crores. Though the servicing liability due this in respect of U.T.
period loans has been waived, I have not provided for payment of accumulated
arrears of Rs. 25.16 crores, as our resources position does not permit
me do do so. As mentioned earlier, we propose to take up the issue
of write off of these loans again with the Union Government.
BUDGET ESTIMATES FOR 1993-1994:
17. After having presented surplus budgets for the
last two years and, more important, maintaining the position in practice,
I am this time constrined to come before this august House with a
Budget which reveals an over-all deficit. Must against my wishes,
I could not help it.
Sir, as you know, over 90 percent of our budget is
funded by the Centre. Of late, our requirements and commitments have
been growing at a pace faster than that of the flow of Central support.
The problem of Non-Plan gap to which I made a reference earlier is
posing a serious menace. In this context, I would request Hon’ble
Members’ unstinted cooperation in doing our best in mobilizing additional
resources and cutting down avoidable expenditures.
18. While on this subject, I would like to draw the
attention of Hon’ble Members to an important development in the constitution
by the President of India of the Tenth Finance Commission. This Commission
is required to make its recommendations on tax sharing and grant-in-aid
to States for the five years (1995-2000). This Commission which is
expected to submit its report by November this year has called for
colossal amount of data on various aspects of State’s finances and
economy, apart from a memorandum containing State’s views on its terms
of reference. At this stage, we may only wish that the commission
makes realistic evaluation of our requirements and recommends adequate
devolution of funds to not only pull the State out of the morass of
Non-Plan gaps but to enable it to make reasonable contribution towards
creation of necessary developmental infra-structure. From our side.
I may only assure that the State would spare no effort to project
its problems before the commission in their true perspective.
19. Coming to the figures, the Budget Estimates place
revenue receipts at Rs. 4236.91 crores and revenue expenditures at
Rs. 364.88 crores, involving a surplus of Rs. 59.03 crores on Revenue
Account. Most of this is Plan account. On Public Account also, estimates
reveal a surplus of Rs. 12.25 crores. The problem arises on Capital
Account. Because of huge deficit of Rs. 72.34 crores in the Budget.
With this, the deficit at the close of the year is estimated at Rs.
21.57 crores.
20. I made a reference earlier to the U.T. period
loans. For the reasons indicated already, we have not been paying
the dues and have thus accumulated arrears of Rs. 25.16 crores. Another
amount of rS. 7.03 crores is due in 1993-1994. I have not made provision
for payment of these dues. We hope that the Government of India would
agree to our request for write off of these dues. Another contingent
liability for which I have not made provision in my budget is the
cost of implementing the recommendations of the Pay Commission which
submitted its report in December last. These recommendations are under
examination of the State Government. For payment of further dearness
allowance also, I have not made any provision in the budget. I expect
the departments to accommodate as much of the liability as possible
within the Budget allocations made to them through vigorous efforts
at economy in Non-Plan expenditure.
21. For the present, I am not proposing any measures
for additional resource mobilization. During the course of the year,
the Government may come forward with some such measures depending
upon the needs of the situation. Efforts will also be made to effect
better recovery of dues and to economise to the utmost on non-plan
expenditures apart from improving productivity and efficiency of Government
functioing.
22. Sir, before closing, I must heartily thank on
behalf of this august House, the Hon’ble Union Finance Minister, for
a bold proposal made by him in his speech while presenting the Central
Budget in the Parliament, for the grant of tax- holiday for a period
of five years to the industrial undertakings which may bee set up
in the North-East. I hope that people from the State and others would
take advantage of this concession and help in the creation of developmental
infrastructure in Mizoram.
23. In the end, I would like to thank all those involve
in the preparation and printing of the Budget especially the officers
and staff of the Finance Department and Printing and Stationery Department
for the hard work put in by them so as to present the Budget before
this august House well in time. May I also thank you Sir, and the
Hon’ble Members for bearing with me. I earnestly request them to give
me the benefit of their wise counsel for guidance.
24. With these words, Sir, I commend the State Budget
for 1993-1994 for the consideration and approval of this august House.
Thank you, Sir.
