03-26-2007, 09:32 PM
Op_Ed in Pioneer, 26 March 2007
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Innovative Rajasthan
Vasundhara Raje's Government has presented a Budget with unique features and shown that it can generate resources, says Lokpal Sethi
Rajasthan's Budget for 2007-08 has many innovative and unique features that focus on youth development, poverty alleviation and social sector development.
As per the recommendations of 12th Finance Commission, the Rajasthan Government adopted the FRBM Act in 2005 to bring fiscal deficit down to three per cent of the GSDP by 2008-09. With two years to go to meet that target, the Government has already almost achieved the goal of curbing fiscal deficit.
The Budget shows that the Government has vastly improved financial management by generating a surplus revenue of Rs 214.77 crore, which is .75 per cent of the total revenue. This indicates the sound financial health of the State and the resource generating capability of the Government. Though the surplus revenue is marginal, it would serve as a sound foundation for better fiscal management in future.
Keeping all this in view, the Government has decided to amend the FRBM Act of 2005 to create a Rajasthan Development and Poverty Alleviation Fund, a first of its kind in the country. Initially, the Government will transfer Rs 300 crore to this fund. Chief Minister Vasundhara Raje, who holds the finance portfolio, does not see this as a populist, one-off measure, but a permanent arrangement. Backed by legislation, the fund cannot be abolished and future Governments will have to transfer part of their surplus revenue to it.
With the number of youth increasing, Ms Vasundhara Raje has let it be known that she is determined to look after this section of society. In the Budget, she has announced an allowance for unemployed graduates. Under this scheme, each registered unemployed graduate will get a monthly allowance of Rs 400. Unemployed graduate women will be entitled to a higher allowance of Rs 500 while physically challenged unemployed will be entitled to Rs 600 every month.
To encourage education among girls in rural areas where they have to travel a long distances to reach schools, a novel scheme has been formulated. Under this scheme, the Government will bear 80 per cent of the cost of bicycles purchased by school-going girls. If the distance from home to school cannot be covered on bicycle, the Government will provide Transport Vouchers to girls. Each of them will be entitled to vouchers worth Rs 5 every day. A group of girls can pool these vouchers to hire a vehicle to attend school.
Even as other State Governments talk of a pension scheme for the unorganised sector, Ms Vasundhara Raje has announced a voluntary contributory scheme.
Before the BJP came to power in December 2003 and Ms Vasundhara Raje took over as Chief Minister, the State's finances were in a shambles. It had become a State that perennially lived on Reserve Bank overdrafts ranging between 60 and 118 days. During the past three-and-a-half years, the State Government has not taken even a single day's overdraft from the RBI.
The Finance Commission since 2004 has been satisfied with the BJP Government's management of finances. During the first year of the BJP Government, the Commission gave Rs 59 crore as incentive to the State for better financial management. For the current year, the incentive will amount to more than Rs 400 crore.
Apart from Ms Vasun-dhara Raje, Principal Secretary, Finance, Rajiv Mehrishi, one of the main architects of the 2007-08 Budget, and his team of officials have reasons to be satisfied. They have received a pat on the back from the Finance Commission, the Planning Commission and Union Finance Minister P Chidambaram for their management of the State's finances. Mr Mehrishi and his team have translated Ms Vasundhara Raje's vision into action through the Budget.
<b>In 2003-04, the Annual State Plan's size was Rs 4,285 crore.</b> The then Congress Government, headed by Mr Ashok Gehlot, had taken the stand that it was not in a position to generate additional resources to increase the size of the Plan. <b>The size of the Annual Plan for 2007-08 is Rs 11,639 core, a near three-fold increase over 2003-04.</b> The Planning Commission approves the Plan size of any State Government according to its capacity to mobilise resources. When the State Government proposed an Annual Plan of Rs 11,569 crore, the Planning Commission, acknowledging that the former has the capacity to generate resources, increased the size by another Rs 70 crore.
When Ms Vasundhara Raje presented her first surplus Budget for 2003-04, many experts expressed their doubts as they were of the view that the finances of the State were in a mess and there was no hope to increase tax revenue. But, revised Budget estimates of that year showed that the Government had not only achieved its revenue target, but also surpassed it in many areas. Since then, she has been presenting surplus Budgets. For the next financial year, the Budget surplus, it is estimated, would be around Rs 359 core.
In the past, Finance Ministers have announced many welfare and development schemes in their Budget speeches without making specific financial provisions. This is the first time that the State Government has announced several welfare schemes, involving Rs 1,200 crore, and made the financial provisions in the Budget to implement them during the fiscal.
The approach of the BJP Government has been to reduce taxes, the assumption being that lower taxes will encourage people to pay their dues instead of cheating on them. So, even after reducing taxes, revenue collection has increased by 20 per cent. As in the previous three Budgets, this time too Ms Vasundhara Raje has not imposed any new tax. At the same time she has rationalised many of the existing taxes.
The BJP Government did its homework before introducing VAT in the State. This has paid rich dividends with collections set to increase by over 20 to 25 per cent in the coming years. Since VAT involves traders issuing cash memos, the Government, to encourage consumers to insist on receipts, has come out with a novel scheme: A lottery will be drawn with the cash memos and the winner could win up to Rs 1 lakh.
<!--QuoteEnd--><!--QuoteEEnd-->
Could be propaganda article but has numbers to back it.
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Innovative Rajasthan
Vasundhara Raje's Government has presented a Budget with unique features and shown that it can generate resources, says Lokpal Sethi
Rajasthan's Budget for 2007-08 has many innovative and unique features that focus on youth development, poverty alleviation and social sector development.
As per the recommendations of 12th Finance Commission, the Rajasthan Government adopted the FRBM Act in 2005 to bring fiscal deficit down to three per cent of the GSDP by 2008-09. With two years to go to meet that target, the Government has already almost achieved the goal of curbing fiscal deficit.
The Budget shows that the Government has vastly improved financial management by generating a surplus revenue of Rs 214.77 crore, which is .75 per cent of the total revenue. This indicates the sound financial health of the State and the resource generating capability of the Government. Though the surplus revenue is marginal, it would serve as a sound foundation for better fiscal management in future.
Keeping all this in view, the Government has decided to amend the FRBM Act of 2005 to create a Rajasthan Development and Poverty Alleviation Fund, a first of its kind in the country. Initially, the Government will transfer Rs 300 crore to this fund. Chief Minister Vasundhara Raje, who holds the finance portfolio, does not see this as a populist, one-off measure, but a permanent arrangement. Backed by legislation, the fund cannot be abolished and future Governments will have to transfer part of their surplus revenue to it.
With the number of youth increasing, Ms Vasundhara Raje has let it be known that she is determined to look after this section of society. In the Budget, she has announced an allowance for unemployed graduates. Under this scheme, each registered unemployed graduate will get a monthly allowance of Rs 400. Unemployed graduate women will be entitled to a higher allowance of Rs 500 while physically challenged unemployed will be entitled to Rs 600 every month.
To encourage education among girls in rural areas where they have to travel a long distances to reach schools, a novel scheme has been formulated. Under this scheme, the Government will bear 80 per cent of the cost of bicycles purchased by school-going girls. If the distance from home to school cannot be covered on bicycle, the Government will provide Transport Vouchers to girls. Each of them will be entitled to vouchers worth Rs 5 every day. A group of girls can pool these vouchers to hire a vehicle to attend school.
Even as other State Governments talk of a pension scheme for the unorganised sector, Ms Vasundhara Raje has announced a voluntary contributory scheme.
Before the BJP came to power in December 2003 and Ms Vasundhara Raje took over as Chief Minister, the State's finances were in a shambles. It had become a State that perennially lived on Reserve Bank overdrafts ranging between 60 and 118 days. During the past three-and-a-half years, the State Government has not taken even a single day's overdraft from the RBI.
The Finance Commission since 2004 has been satisfied with the BJP Government's management of finances. During the first year of the BJP Government, the Commission gave Rs 59 crore as incentive to the State for better financial management. For the current year, the incentive will amount to more than Rs 400 crore.
Apart from Ms Vasun-dhara Raje, Principal Secretary, Finance, Rajiv Mehrishi, one of the main architects of the 2007-08 Budget, and his team of officials have reasons to be satisfied. They have received a pat on the back from the Finance Commission, the Planning Commission and Union Finance Minister P Chidambaram for their management of the State's finances. Mr Mehrishi and his team have translated Ms Vasundhara Raje's vision into action through the Budget.
<b>In 2003-04, the Annual State Plan's size was Rs 4,285 crore.</b> The then Congress Government, headed by Mr Ashok Gehlot, had taken the stand that it was not in a position to generate additional resources to increase the size of the Plan. <b>The size of the Annual Plan for 2007-08 is Rs 11,639 core, a near three-fold increase over 2003-04.</b> The Planning Commission approves the Plan size of any State Government according to its capacity to mobilise resources. When the State Government proposed an Annual Plan of Rs 11,569 crore, the Planning Commission, acknowledging that the former has the capacity to generate resources, increased the size by another Rs 70 crore.
When Ms Vasundhara Raje presented her first surplus Budget for 2003-04, many experts expressed their doubts as they were of the view that the finances of the State were in a mess and there was no hope to increase tax revenue. But, revised Budget estimates of that year showed that the Government had not only achieved its revenue target, but also surpassed it in many areas. Since then, she has been presenting surplus Budgets. For the next financial year, the Budget surplus, it is estimated, would be around Rs 359 core.
In the past, Finance Ministers have announced many welfare and development schemes in their Budget speeches without making specific financial provisions. This is the first time that the State Government has announced several welfare schemes, involving Rs 1,200 crore, and made the financial provisions in the Budget to implement them during the fiscal.
The approach of the BJP Government has been to reduce taxes, the assumption being that lower taxes will encourage people to pay their dues instead of cheating on them. So, even after reducing taxes, revenue collection has increased by 20 per cent. As in the previous three Budgets, this time too Ms Vasundhara Raje has not imposed any new tax. At the same time she has rationalised many of the existing taxes.
The BJP Government did its homework before introducing VAT in the State. This has paid rich dividends with collections set to increase by over 20 to 25 per cent in the coming years. Since VAT involves traders issuing cash memos, the Government, to encourage consumers to insist on receipts, has come out with a novel scheme: A lottery will be drawn with the cash memos and the winner could win up to Rs 1 lakh.
<!--QuoteEnd--><!--QuoteEEnd-->
Could be propaganda article but has numbers to back it.