Government of Mizoram
Budget Speech: 1996-97
By Pu Lalhmingthanga
Finance Minister
Sir,
May I have your permission to present to the House
the Revised Estimates for the year 1995-96 and the Budget Estimates
for the year 1996-97.
2. Let me , Sir, at the outset, submit that the Budget
Estimates for the year 1996-97 which I propose to present are interim
in nature. Honourable Members know that our budget is heavily dependent
on the flow of resources from the Centre. As much as 93 percent of
our budget is sustained by the Central support. Because of the ensuing
general elections in the country, the Central Government has deferred
finalisation of the Plan outlay and the Central support for 1996-97.
As such, there is no clear picture available about the quantum of
funds from the Centre. Further, the Planning Commission has also not
yet finalized the State Plans. Under the circumstances, it is not
possible to project expenditure levels of the next year in a realistic
manner.
3. The current year has been a year of some achievements
and some sacrifices. The Planning Commission, after fixing the Plan
outlay at Rs.227 crore, allocated additional assistance to the tune
of Rs.22 crore, consisting of Rs.10 crore for the Capital Project,
Rs.8 crore for the Indo-Myanmar trade and Rs.4 crore for the State
University. Thus, the total size of the State Plan rose to Rs.249
crore with the Central support as high as Rs.283 crore. This has been
a unique achievement and while we congratulate ourselves for it, we
also owe our gratitude to the Planning Commission for their generous
allocation to take care of our development needs.
4. In my speech last year, I had mentioned about
our undertaking given to the Planning Commission to raise additional
resources of Rs.20.61 crore towards funding the Plan in the current
year. I take pleasure to inform the Honourable Members that we have
acquitted ourselves creditably by fulfilling this undertaking. In
this connection, I would like to draw the attention of the Honorable
Members to the active deliberation of the Mizoram Resources Mobilisation
and Taxation Enquiry Committee under the Chairmanship of the Chief
Secretary which has held three sittings during the current year and
gave useful and far-reaching recommendations to help raise additional
resources to fund our Plan.Some of these recommendations like revision
of bus fares and rates of profession tax, extension of passenger tax
to taxis, introduction of tax on cable T.V. operators and imposition
of composite tax/fee on tourist buses and taxis have already been
implemented, which have brought an additional revenue to the tune
of Rs.55 lakhs. The Government has also decided to introduce in the
State the system of use of Revenue Stamp of Re 1 on all payments of
Rs.500 and above. The modalities are being worked out.
5. I made a mention about sacrifices. As part of
our efforts to raise resources, we were committed to impound D.A.
increases and Interim Relief of Government employees. But for the
unstinted cooperation extended by employees in agreeing to the scheme
of impounding crediting to their respective GPF accounts, we could
have faced financial problems. Sir, I would like to make an earnest
appeal to the Honourable Members to join me in conveying our sincere
thanks to our employees for this sacrifice in the face of mounting
pressures on their personal budget.
6. Sir, my heart bleeds when I talk of the Chhimtuipui
disaster that struck last year. It is said that the strength of the
people is really seen in adversity and how they cope with it. It goes
to the credit of the people that they bore the brunt stoically despite
huge losses to lives and property. In any adversity like this, availability
of funds to restore the damaged property and rebuild the economy is
always limited and the task is daunting. Besides releasing Rs.1.20
crore from the Calamity Relief Fund, saving from the budget also enabled
releasing an additional amount of Rs.2.36 crore for restoration work.
Our appeal to Government of India resulted in further assistance of
Rs.4.71 crore. We have also received generous financial help to the
tune of Rs.35.13 lakhs from private and voluntary agencies like Churches,
non-government organizations (NGOs) and individuals and we are beholden
to them for this wonderful gesture. At this juncture, I would like
to take the opportunity to thank our Honourable Prime Minister for
this generous cash assistance to the tune of Rs.50,000 to each of
the bereaved families who lost their kith and kin in the tragedy.
I once again salute the brave hearts of our people and the sacrifices
they had to make under the circumstances.
TENTH FINANCE COMMISSION:
7. In my last speech I made a mention of the Tenth
Finance Commission. I take pleasure to inform the Honourable Members
that the per capita transfer of resources to Mizoram under the recommendations
of the Tenth Finance Commission is the highest among the States. The
total devolution recommended by the Commission to Mizoram for the
period 1995-2000 is Rs.1802.01 crore – Rs.1398.37 crore by way of
tax-shares and Rs.403.64 crore by way of grants-in-aid – representing
a step-up of 76.5 percent over the recommendations of the Ninth Finance
Commission for the preceding five-year period 1990-95. Apart from
the revenue gap grants of Rs.331.19 crore, the other grants include
Rs.57 crore for the development of Lengpui Airport, Rs.2.82 crore
for Police housing, Rs.4.31 crore for upgradation of some selected
services, Rs.3.32 crore for improvement of local (rural and urban)
administration and Rs.5 crore as contribution towards the Calamity
Relief Fund. The special grants-in-aid of Rs.57 crore for the Lengpui
Airport was in addition of Rs.20 crore allocated earlier by the Planning
Commission for the two years 1994-95 and 1995-96. Another notable
feature of the report of Tenth Finance Commission is that Mizoram,
for the first time, came to have a share, though small, out of the
grants-in-aid earmarked for distribution to States by way of compensation
in lieu of the repealed tax on the railway passenger fares. This was
in recognition of a stretch of railway-line entering the State upto
Bairabi.
PLAN OUTLAYS:
8. I mentioned that the total size of the State Plan
in the current year is Rs.249 crore with Central support being Rs.283
crore. On present indications, we are expected to spend Rs.234 crore
only in the current year. The shortfall of Rs.15 crore is under the
externally-aided projects. We have approached Overseas Economic Cooperation
Fund (OECF) of Japan through the Government of India, for assistance
for the Tuirial Hydel Project and a fact-finding team is likely to
visit the State early next year. In addition to the State Plan, the
expenditure on Centrally Sponsored Schemes is estimated at Rs.57.55
crore and on N.E.C.Schemes at Rs.16.13 crore. An extra outlay of Rs.8.05
crore is on schemes funded by the Rural Electrification Corporation
and the Power Finance Corporation. For the next year, we have, as
directed by the Planning Commission, tentatively assumed the outlay
on the Plan at the same level as the normal Plan in the current year.
The Plan expected to be finalized by the Planning Commission after
general elections will be reflected only in the regular budget for
1996-97 to be presented later.
REVISED ESTIMATES FOR 1995-96:
9. With an overall surplus of Rs.4.67 crore during
1994-95, the current year (1995-96) opened with a deficit of Rs.27.25
crore. The Revised Estimates framed now for 1995-96 reveal a closing
deficit of Rs.41.21 crore. Though there is an deterioration of resources
to the tune of Rs.18.63 crore over the last year, bulk of this deterioration
was only technical in nature in the sense that the expenditure corresponding
to the assistance of Rs.14.96 crore received at the fag end of the
last year for payment of rental charges to those whose property was
utilized by the security forces during the counter-insurgency operations,
had to be provided in the Revised Estimates for the current year.
10. From the receipts angle , the current year proved
quite difficult. For this year (1995-96), the Tenth Finance Commission
had estimated a deficit of Rs.293.78 crore in the Mizoram’s non-Plan
Revenue Account. To cover the same fully, they assumed devolution
of Rs.146.53 crore by way of tax-shares and recommended general grants-in-aid
of Rs.147.25 crore for the balance. However, the tax-share allocated
by the Government of India was reduced to Rs.135.09 crore on account
of expected shortfall in the revenue from the Union Excise Duties.
Our Honourable Chief Minister took up the matter with the Union Finance
Minister with a plea to compensate us for this shortfall through a
corresponding increase in the quantum of the grants-in-aid, in compliance
with the true spirit underlying the Finance Commission’s assessment.
This, however, did not materialize. There was further erosion in our
receipts in the form of a recovery of Rs.10.05 crore from our tax-share
on account on the excess payment stated to have been made in 1992-93.
11. The Budget Estimates for the current year as
presented by me last year had shown an overall surplus of Rs.8.72
crore. As compared to this, the Revised Estimates framed now show
a deficit of Rs.13.96 crore. Apart from the shortfall in the State’s
tax-shares, there were certain inescapable increases in expenditure
also. The non-Plan expenditure has grown from Rs.308.30 crore in the
B.E. stage to Rs.381.64 crore at the R.E. stage. One of the reasons
as stated above, was the provision for the payment of rental charges
which had to be made in the Revised Estimates. Besides, provision
had to be made for payment of compensation to those whose property
was damaged during the couter-insurgency operations, corresponding
to the grants-in-aid of Rs.18.36 crore received from the Government
of India. There was extra expenditure also because of massive land-slides
in the southern parts of the State. Also, I had deliberately not made
provision in the Budget Estimates for payment of two installments
of DA due to employees in the fond hope that this burden would by
absorbed by the departments through economy in their normal budget
allocations. This, however, could not be absorbed. Further, payment
of Interim Relief also had to be made to employees including arrears
for the period September 1993 to March 1995. However, as already stated,
due to cooperation extended by our employees, much of these could
be impounded in GPF accounts.
BUDGET ESTIMATES FOR 1996-97:
12. On the basis of the Revised Estimates for 1995-96,
the next year 1996-97 is expected to open with a deficit of Rs.41.21
crore. One of the foremost considerations before me while framing
the budget for the next year was to reduce this deficit to the utmost
extent possible. With the cooperation of different departments, I
have succeeded in framing a surplus budget for 1996-97. The budget
shows a surplus of Rs.4.47 crore against the deficit of Rs.13.96 crore
as per the Revised Estimates for the current year, showing an improvement
of Rs.18.43 crore. This was possible mainly through the avoidance
of inessential expenditure and containment of the growth of other
non-Plan expenditure. I hope to maintain this trend in the final budget
for the year.
13. The Budget Estimates show a surplus of Rs.97.89
crore on Revenue Account, with revenue receipts placed at Rs.581.82
crore and revenue expenditure at Rs.483.93 crore. However, with a
huge deficit of Rs.94.85 crore on Capital Account, there is a small
surplus of Rs.3.04 crore only in the Consolidated Fund. The Public
Account also reveals a small surplus of Rs.1.43 crore. With the overall
surplus of Rs.4.47 crore, the closing deficit is estimated at Rs.36.74
crore.
14. Taking the budget as a whole, total disbursements
in 1996-97 amount to Rs.643.10 crore consisting of Rs.257.08 crore
on Plan account and the remaining Rs.386.02 crore on non-Plan account.
The Central support comes to Rs.599.74 crore, accounting for 93.26
percent of the aggregate budget.
15. As stated earlier, the outlay on the State Plan
and the Central assistance therefore are tentatively pitched in the
budget at the level of the current year only. Provision has also not
been made in the budget for the fresh installments of D.A. which the
Government may have to pay to the employees next year. Following the
report of the Fifth Central Pay Commission expected early next year,
the State Government may also have to go in for extensive pay-revision
for its employees. On the other hand, the Government may have to go
in for further additional resource mobilization on the basis of the
recommendations of the Mizoram Resources Mobilisation and Taxation
Enquiry Committee which is in session. I propose to take up all these
aspects at the time of framing the final budget for the year 1996-97.
16. Before I close, I want to make an earnest appeal.
Our demand on the limited resources is ever growing as the Government
expenditure is increasing year after year. As per the recommendations
of the Tenth Finance Commission, the non-plan gap grant is shrinking
every year until it disappears totally in another four years time.
While we have made effort to raise resources of our own to match the
need, there are limitations. The only alternative is to lighten our
belts and the departments of the Government spend discreetly and avoid
unnecessary expenditure. As they say, ‘economy is a great source of
revenue’ and I want every department to follow this so that we can
learn to live within our means. I am hopeful that the departments
would heed to this advice.
17. While as required, the Annual Financial Statement
for the year 1996-97 has been laid before the House and the connected
Demands for Grants are also circulated to the Honourable Members,
I am, at this stage, seeking a "Vote on Account" only for
the first four months of the financial year 1996-97.
18. Sir, before I close, I would like to thank you
and all other Members of the House for giving me a patient hearing
and attention. I also express my thanks to the Officers and staff
of all departments, especially the Finance Department and the Government
Press. Further, this is the first time that the State budget has been
largely prepared on the Computer. This was possible only because of
the special efforts put in by the Mizoram Unit of the National Informatics
Centre. My special thanks are due to them for this cooperation.
Thanking you, Sir.
