Poll dole: Social security scheme for farmers, workers
The two newly introduced schemes, at an outlay of ₹1,500 crore, aimed at wooing voters in the poll year, will increase the state’s revenue deficit GOING THE KAUTILYA WAY
CHANDIGARH: In a poll-centric move, Haryana finance minister Capt Abhimanyu announced two new schemes, providing financial and social security cover to families of farmers and workers in the unorganised sector.
Presenting the last budget of the incumbent BJP government in the state, the finance minister said he is providing an outlay of ₹1,500 crore in the budget for these schemes.
The newly announced schemes— Cm-smridhi Kisan Pariwar Khata and Cm-smridhi Shramik Pariwar Khata— will provide financial and social security cover to families of farmers having landholding of 1 to 5 acres and workers whose monthly family income is less than ₹15,000.
“In case of farmers, the benefit will be in addition to the Pradhan Mantri Kisan Samman Nidhi scheme, which provides a benefit of ₹6,000 per annum to small and marginal farmers,” said Capt Abhimanyu.
Later at a press briefing, the finance minister, however, refused to explain the contours of the newly introduced schemes. “We will come out with the details later,’’ he said.
THE PRICE OF POPULISM
The populism in terms of the newly introduced social security schemes, for which the FM has provided an outlay of ₹1,500 crore, the reduction in electricity tariff for domestic consumers (done last year) and the never-ending burden of providing subsidised power for the farm sector will come at a big cost. The populist measures will increase the revenue deficit. Revenue deficit is the gap between the revenue earned and spent or excess of revenue expenditure over the revenue receipts.
The rural electrification (RE) subsidy for the pampered farm sector has been pegged at ₹6,878 crore in the 2019-20 budget estimates. However, the subsidy amount seems to have been downplayed, considering the fact that the state government had pegged the RE subsidy at about ₹6,478 crore in 2018-19 budget estimates but ended paying ₹8,117 crore in the revised estimates. The ₹8,117 crore amount also included the power subsidy component for domestic consumers.
REVENUE DEFICIT UP
The finance minister has estimated the revenue deficit for 2019-20 to be at ₹12,022 crore, which will be 1.53% of gross state domestic product (GSDP).
This will be ₹3,516 crore higher than the revised estimates of 2018-19. The revenue deficit was ₹8,506 crore in 2018-19 revised estimates which was 1.20% of the GSDP. The finance minister, however, said that percentage of revenue deficit in terms of the GSDP has been decreasing with every passing year.
The revenue receipt in 2019-20 is likely to increase to ₹82,219 crore as against ₹76,828 crore in 2018-19 revised estimates, registering an increase of ₹5,391 crore. The revenue expenditure has been estimated at ₹94,241 crore, higher by ₹8,907 crore over the 2018-19 revised estimates.
Capt Abhimanyu, in his budget address, said that since he has not imposed any new tax, he proposes to raise the revenue receipts of ₹82,219 crore in 2019-20 through efficient realisation of tax and non-tax receipts.
DEBT LIABILITY TO GO UP
The debt liability of the state government is also likely to go up to ₹1,79,440 crore by March 2020 from the present ₹1,56,929 crore. The debt liability will constitute 22.86% of the GSDP which, the finance minister said, was within the stipulated limit of 25%.
The interest payment liability during 2019-20 is estimated to be ₹16,632 crore which is about 20% of the total revenue receipts.
The state government also proposes to borrow up to 3% of the GSDP, amounting to ₹22,413 crore in 2019-20. Besides, a grant-in-aid of ₹9,872 from the central government, will be another major source of funding in 2019-20, the FM said.
CAPITAL EXPENDITURE INCREASES
The finance minister announced that the capital expenditure in 2019-20 budget estimates has increased to ₹37,924 crore as compared to ₹30,011 crore in 2018-19 budget. It will be about 28% of the total budget.
The outlay allocated for capital expenditure is utilised to create, acquire, upgrade and maintain physical assets. Quoting from Kautilya’s Arthashastra, finance minister Capt Abhimanyu said a government is happy when people are happy, people’s welfare is government’s welfare.