Mohinder Verma
JAMMU, Feb 12: The gap between receipts and expenditure on power purchases has continuously been widening during the past several years and unless this gap is reduced considerably in the coming years the deterioration in the fiscal deficit will continue to haunt the State. Moreover, the financial implication involved in the payment of remaining installments of the 6th Pay Commission arrears will make it difficult to achieve targets under Fiscal Responsibility and Budget Management Act (FRBM).
This has been observed in the Economic Survey for the year 2013-14 tabled in the State Legislature today. “The gap between receipts from power consumers and expenditure on power purchases has continuously been widening and a deficit of Rs 275 crore in 2002-03 has grown to Rs 2281 crore during 2012-13’, the document said.
“The shortfall has contributed to the deterioration in the fiscal deficit despite record performance on tax revenue front and large unbudgeted revenue on account of water usage charges collected from the National Hydroelectric Power Corporation (NHPC) during 2011-12”, the Economic Survey said.
Highlighting the grim scenario vis-à-vis gap in receipts from power consumers and expenditure on purchase of power, Economic Survey said that in the year 2002-03 the deficit was Rs 275 crore and the same increased to Rs 767 crore in 2003-04 and Rs 935 crore in 2004-05. Despite tall claims of the Power Development Department about laying required focus on the revenue realization strictly in accordance with the consumption, the deficit increased to 1290 crore in 2005-06.
Though in the year 2006-07, the deficit reduced to Rs 876 crore yet it again increased sharply to Rs 1149 crore in 2007-08 and Rs 1404 crore in 2008-09. After registering slight decline to Rs 1295 crore in 2009-10, the deficit continued to increase with Rs 1488 crore in 2010-11, Rs 1993 crore in 2011-13 and Rs 2281 crore in 2012-13.
“However, the collection of power revenue registered a remarkable increase of 57.8% during 2012-13 and this trend of collections will have to be sustained and further improved in order to improve financial health of the State’, the Economic Survey stressed.
Not only widening gap between power receipts and expenditure on power purchase, payment of remaining installments of 6th Pay Commission arrears will also be an area of major concern warranting priority focused attention in the coming years, the Economic Survey said.
The remaining installments of Pay Commission arrears of State Government employees and pensioners are to be paid during 2014-15 and 2015-16 with financial implication of Rs 1680 crore which will make it difficult to achieve the targets under various fiscal indicators as laid down under Fiscal Responsibility and Budget Management Act (FRBM), the document said.
About the State’s own deficit, the Economic Survey said that the State has always continued to be revenue surplus only due to high levels of grants from the Central Government and the State’s own revenue deficit has been consistently high and steadily rising with the expenditure growth which is far outpacing valiant efforts of the tax collection departments and additional revenue mobilization.
“However, the options for compression of expenditure which are of committed nature, are quite limited”, the Economic Survey pointed out and laid stress on special efforts from all the departments to identify new sources of revenue and augmenting collections from existing sources on the non-tax revenue side, including power receipts.
Stating that State’s own resources including share of Central Taxes to GSDP ratio is 15.58%, the Economic Survey said, “as the State economy is planned to grow at an annual rate of 8% over the 12th Five Year Plan it should be the endeavor to increase own revenue to GSDP ratio over the existing level”.
The Economic Survey has also noted with concern sudden cut of over Rs 1000 crore in the devolution of central funds imposed by the Government of India and said that this had its deleterious effect on the pace of State economy, which could not achieve its targeted GSDP thereby disturbing other related ratios.
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