CM presents Rs 1, 090-cr deficit budget

•Liquor, petrol and limestone to cost more
•MLA scheme amount raised to Rs 2 cr

Chief Minister Mukul Sangma presents the annual budget for 2016-17 in the state assembly on Monday. (ST)
Chief Minister Mukul Sangma presents the annual budget for 2016-17 in the state assembly on Monday. (ST)

SHILLONG: Liquor, petrol and limestone will be more expensive in Meghalaya as the government on Monday levied fresh taxes on them to meet shrinking resources after the National Green Tribunal (NGT) banned coal mining in the state.
Presenting a Rs 1, 090-crore deficit budget for 2016-17 in the state assembly, Chief Minister Mukul Sangma proposed a 10 percent hike in Value Added Tax (VAT) on liquor from 20 percent to 30 percent besides raising the levy on import pass fee and transport fee on alcohol, beer and wine.
The Gross State Domestic  Product (GSDP) growth pegged at 3.6 per cent.
Sangma, who also holds the finance portfolio, raised VAT on petrol by 22 percent and also withdraw 56 paise per litre rebate on petrol.
The Chief Minister, however, told reporters later that even after the imposition of taxes, liquor and petrol will still be cheaper in Meghalaya compared to Assam.
He also raised the rate of cess on limestone from Rs.40 to Rs.60 per tonne.
The fresh tax proposals on liquor and petrol are aimed to generate additional revenue to meet due to NGT ban on coal mining.
The announcement of the creation of as many as 15 new police stations and formation of  fur new Civil Sub-divisions  and the same number of new Community and Rural Development  blocks were greeted by the members in the House with the thumping of desks as also the increase in MLA scheme from Rs 1 crore to Rs 2 crore annually.
Presenting the Budget estimates in the House, the Chief Minister said that the while estimated total receipts stand at R 10,173 crore, the revenue receipts are estimated at Rs 8,981 crore and capital receipts at Rs 1,192 crore. Excluding  borrowings and other liabilities, the total receipts are estimated to be Rs 9,013 crore.
As far as expenditure is concerned, the proposed total expenditure is Rs 10,507 crore during 2016-17, of which revenue expenditure is estimated at Rs 8,594 crore and capital expenditure at Rs 1,913 crore. Excluding repayment of loans, the estimated total expenditure is Rs 10,103 crore.
As the expenditure is more than the revenue, the deficit budget stands at Rs 1,090 crore.
However, the interest payment during 2016-17 is estimated at Rs 551 crore and pension payment at Rs 491 crore.
The maximum allocation of funds under the Budget is for Community and Rural Development department  with Rs 811.85 crore followed by Education department (Rs 677 crore), Roads and Bridges (Rs 471.80 crore), Health (Rs 470 crore), Agriculture and Horticulture (279.15 crore)  and  Water Supply and Sanitation (Rs 253 crore) among others.
Later, speaking to reporters, the Chief Minister said that though the deficit has increased compared to the Budget of 2015-16 which was Rs 819 crore, he is hopeful that with various initiatives the government would  be able to reduce the deficit.
Announcing the tax proposals, the Chief Minister said that this was necessitated in order to meet the challenges occasioned by the shrinking resource base on account of the NGT ban on coal mining and to generate additional resources to the State to meet its multifarious requirements in crucial sectors of the economy.
MLA scheme hiked
The Chief Minster also announced hike in the MLA scheme in the Budget.
“The Special Rural Works Programme (SRWP), Special Urban Works Programmes(SUWP) have played an important role in filling the critical gaps in the rural and urban areas. I propose to increase the present allocation of Rs 1 crore to Rs 2 crore per Assembly constituency from the next financial year”, the Chief Minister said.
The Chie Minister said that the challenges faced by the State are the revenue shortfall, due to the rippling effect of the restrictions imposed on mining of minerals and reduced transfer than what was projected in the share of central taxes.
“The State was able to keep its fiscal deficit within the comfortable limits of 2 to 3% of GSDP during the years 2009 to 2014. However, during 2014-15, on account of the NGT ban on coal mining in the State, the revised fiscal deficit increased to 3.89%, which was slightly higher than the target of 3%”, the Chief Minister said, adding that the debt GSDP ratio for the same period was at 26.55%, which shows significant improvement over the target of 31.70% set by the 13th Finance Commission in its fiscal road map for the State.
During 2015-16, the debt-GSDP ratio was projected at 27.05% and the fiscal deficit at 2.8 % of the GSDP.
As per the recommendations of the 14th Finance Commission and based on the fiscal assessment of the expected performance of the economy during the award period, the State is entitled to share in Central taxes of Rs 4,291 crore. “However, based on its current assessment, the Centre has determined the entitlement at Rs 3,668.82 crore only for 2016-17. This would mean a reduction of Rs 622.18 crore”, the Chief Minister said.
To sustain the growth momentum, the Chief Minister said the government will continue with the  strategy of balancing the investment in development sectors without disregarding the  commitment to administrative expenditure. “The Government, therefore, is committed to make adequate budgetary provision in 2016-17 to defray additional expenditure on account of creation of SF-10 to tackle law and order, the need to provide necessary infrastructure to the four newly created Districts and for new District Courts on account of separation of the judiciary from the executive, amongst other things”, he said.
The  Chief  Minister said the Government has taken necessary measures to generate additional revenue by way of increasing the rates of taxes under the Meghalaya Value  Added Tax Act on cigarettes and others,  High Speed Diesel (HSD) and other internal combustion oil but excluding petrol. This measure is expected to generate additional revenue of about Rs 18 crore in the current financial year.
With the implementation of the Meghalaya Clinker Cess Act, 2015, the Government has collected an amount of Rs 63.72 lakh till February, 2016 as cess levied and collected from sale of clinker at the rate of Rs 20 per metric tonne, the Chief Minister said.
The Government is gearing up for implementation of the Goods and Services Tax (GST), as and when it is introduced, he said, while adding that the concerns of the State Government, with respect to implementation of GST, have been appropriately articulated to the Government of India, through the platform of the Empowered Committee. Trainings and workshops are being conducted for smooth transition to GST in future, he added.

Budget 2016-17- Highlights

lVAT on liquor hiked from 20% to 30%
lMore levy on import, and transport pass fees on alcohol, beer, wine
lWithdrawal of rebate of 56 paise per litre on petrol
lHike in VAT on petrol from 20% to 22%.
lCess on limestone hiked from Rs 40 per metric tonne to Rs 60.
l15 new police stations      
lThree outposts to be upgraded
lFour new Civil Sub Divisions
lFour new  C&RD Blocks.
lMLA scheme hiked from Rs 1 core to 2 crore  

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