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| Pension, wages bill causes whopping increase in fiscal deficit | | 79 pc of state revenue coming from Centre | |
Jammu, Feb 8 The whopping increase in the fiscal deficit of the state has primarily been caused by huge expenditures on salaries as well as pension payments to the state government employees.
This was revealed in the report of Comptroller and Auditor General tabled in the State Assembly today.
According to the report, salaries and wages paid by the state government this year accounted for 16 percent of state’s GDP and it amounts to 47 percent of the revenue expenditure of the state.
However, this is in clear violation of the norms laid by the government of India, according to which the total salary bill relative to revenue expenditure net of interest payments and pensions was not to exceed 35 percent.
Likewise, there was a whopping increase in pension payments as these grew by 27 percent from 731 crore in 2004-05 to 929 crore during 2006.
This head is likely to increase next year as pension liabilities are likely to increase further in future.
A sharp increase in revenue expenditure as well as capital expenditure by 38.53 percent has led to deterioration in both fiscal and primary deficits respectively from 1665 crore and 562 crore in 2004-05 to 2643 crore and 1528 crore in 2005-06 repectively.
According to the report, the increase in revenue expenditure was due to great increase in non-plan revenue expenditure during the current year which was as high as 20.53 percent largely on account of sharp increase in the expenditure by Rs 579 crore in social services, 518 crore in economic services and 389 crore in general services.
As far as revenue receipts of the state are concerned, it comprises own tax, non-tax revenues, central tax transfers and grant in aids from Government of India.
The revenue receipts of the state in 2000-01 was 5660 crore and it doubled to 10315 crore in 2005-06.
While 21 percent of revenue receipts in the current year from state’s own tax and non-tax revenue, the rest 79 percent comes as central tax transfers and grant in aids from Union Govt.
Sales tax was the major contributor of states own tax revenue and contributed 62 pc of the revenue, it was followed by goods and passenger tax 15 pc and state excise contributed 13 percent.
Of the non-tax revenue sources, power receipts contributed 72 pc, interest receipts, dividends and profits 5 pc, and receipts from forestry and wild life accounted for 8 percent.
The report, however, says that non-tax revenue recipts declined by 16.38 percent this year, which happened primarily due to decrease of 83 percent in dividend earning.
More over, the current levels of cost recovery (revenue receipts as a percentage of revenue expenditure) in supply of merit goods and services by government were 0.07 per cent for secondary education, 0.04 per cent for university and higher education, 0.22 per cent for technical education, 1.91 percent for medical and public health, 3.54 per cent for water supply and sanitation and 4.27 per cent for housing.
Besides, the arrears of tax revenue at the end of March 2006 were Rs. 920.45 crore, which constitute 57 per cent of tax revenue of the state. Of these, Rs. 556.85 crore (60 per cent ) were more than five years old. A desegregated analysi of revenue arrears reveal that 95 per cent of pending arrears related to sales tax (Rs. 877 crore) followed by taxes on goods and passengers (4 per cent) and state excise 0.4 per cent).
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