Economics of Haryana Budget 2021-22

Haryana Chief Minister Manohar Lal.

Professor M.M. Goel

(Asian independent) A close perusal of the budget speech consisting of 70 pages developed in 242 headings by Shri Manohar Lal, Chief Minister as finance minister (FM) in the state assembly of Haryana on March 12, 2021, gives a sense of satisfaction to the common man called CM. The provisions made in the budget 2021-22 are necessary but to make them sufficient for achieving the pragmatic goals of Atmanirbharta calls for the honest implementation of the programmes therein.

The state budget size of Rs  1,55,645 crore (an increase of 13 per cent of RE of 2020-21) includes revenue expenditure of  Rs 1,16,927  crore and the capital expenditure of Rs 38,718 crore is in tune with the objective of inclusive growth with its challenges including converting careless into careful and useless into useful human resources required for the economy. The target of fiscal deficit to Rs 34003.86 cr ( 3.83% of GSDP), revenue deficit to Rs 29193.95 crore ( 3.29% of GSDP)  and primary deficit to Rs14227.44  (1.60% GSDP) in 2021- 22 confirms the commitment under Fiscal Responsibility and Budget Management Act (FRBM) Act. The rupee goes as repayment of debt 30.80(28.61), economic services25.14 (22.80), social services 31.27(34.65) and general services 12.79(13.94).  The rupee comes from borrowings 38.41(32.08) ,state own tax revenue 40.90 (37.61)  devolution from centre  9.75 ( 16.21) ,non -tax revenue 7.15 ( 11.14) and other receipts 3.79 (  02.96)  out of 100 paisa. The figures in the bracket are for comparison with a budget of 2020-21.

For reducing fiscal deficit if not becoming revenue surplus, there is a strong case for winding up Haryana Tourism Corporation a public sector enterprise maintaining 44 Tourist Complexes is running on loss due to free-rider problem by the government paraphernalia.

The four pillars of the CM as FM including prioritisation of key areas, creation of a medium-term expenditure framework — MTEF, Reserve Fund, outcome led growth, and focus on implementation deserve to be understood, analysed, interpreted and adopted by all the stakeholders. It has been noted that health, agriculture and infrastructure are the key priority areas that will focus on recovery and resurgence. Strengthening the economy of the State through capital investment is the prime focus of the 2021-22 budget marking a paradigm shift in its architecture by allocating an untied fund of Rs. 8,585 crore as Medium-Term Expenditure Framework (MTEF). Orbital Rail Corridor, asset monetization through Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs), Global City near Manesar, International Horticulture Market at Ganaur, Sonepat, are some of our government’s signature projects to accelerate the pace of development deserve the attention of the stakeholders.  During the current year, the government did not utilize borrowing space of around Rs 8,585 crore by adopting tough, fiscally prudent measures. Essentially, it means that we managed to maintain our borrowings around the original provisions of the FRBM Act. For outcome led growth, the Government has laid special emphasis on achieving outcomes, to ensure that the public monies are allocated and spent in a productive, focused manner targeting specific outcomes.

Towards this objective, we have focused on achieving the Sustainable Development Goals (SDGs) through various budgetary allocations and focused implementation of the schemes deserve to be appreciated. Haryana has become the first state in the country to have linked the budgetary expenditure to progress under specific SDGs by establishing an SDG Coordination Centre in collaboration with UNDP and intend to take this forward through the Haryana Institute of Fiscal Management which deserve to be strengthened with experts and other human resources.  The initiative of family card (Parivar Pehchan Patra) has made rapid strides and has achieved comprehensive coverage for improving the ‘Ease of Living’ of citizens of the State, by targeting ‘paperless’, ‘faceless’ service delivery to citizens. We need to become street SMART ( simple, moral, action-oriented, responsive and transparent ) to achieve the well-defined vision of the Haryana Government which is of the firm conviction that grassroots Governance alone can offer solutions to the basic problems people face. This means transferring essential decision-making powers down the Governance pyramid including those to Urban Local Bodies (ULBs) as well as the Panchayati Raj Institutions(PRIs). The Government is committed to make them financially viable and independent units. To make it successful, the establishment of the Inter-District Council (IDC) deserve to be welcomed. To augment the financial resources of ULBs, it has been decided that 2% (normal rate of stamp duty) on registration of the immovable properties in the municipal areas would be directly deposited in the equal ratio in the bank accounts of a respective municipality and the Urban Local Bodies Department which will ensure a regular flow of funds to the local bodies deserve appreciation. To encourage monetization of locked-up assets, the CM as FM proposed to announce a policy for the sale of already leased out shops and other assets which have lessees for 20 years or more for boosting the finances of  ULBs. The Government is considering a proposal to bring a policy for performance-indexing of the municipalities at Municipal Corporation as well as Municipal Council/Committee level to create a positive atmosphere of healthy competition among these bodies. The state government will award the incentive to such municipalities that achieve the performance level fixed in the Municipal Performance Index. Similarly, ensuring empowerment of the PRIs by enhancing capacity building, transfer of works and

Funds to them.  To ensure true empowerment of PRIs, all schemes of the Rural Development Department including District Rural Development Agency (DRDA), Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), Sansad Aadarsh Gram Yojana (SAGY), Pardhan Mantri Aawas Yojana Gramin (PMAY-G), SwaranJayanti Khand Uthan Yojana (SKUY), Swachh Bharat Mission – Gramin (SBM-G) etc. have been transferred to the Zila Parishads along with functionaries. We are also exploring the possibilities of transferring more schemes of different departments working in rural areas to the PRIs to achieve the goal of decentralisation. A unique technology-based initiative – Gram Darshan – for democratic decentralisation has been conceived which will ensure any resident of a Gram Panchayat to submit the demand for development works. On the endorsement of the development works by public representatives, the work will be implemented by the concerned PRI or the Government agency subject to availability of funds.

The various financial powers to PRIs have enhanced their resources of revenue. A surcharge on stamp duty @ of 2% of the value of the property has been levied in the rural areas w.e.f. 24.02.2021. 1% of the collected revenue shall be given directly to the Zila Parishad and Panchayat Samiti and the remaining 1% will be given directly to the Gram Panchayats. The Zila Parishad Panchayat Samitis and the Gram Panchayats will get Rs.400 crore approximately annually for development works. On the same line, 2% Panchayat Duty on the consumption of electricity has been levied w.e.f. 28 February 2021 and the Gram Panchayats will get Rs. 100 crore approximately annually on this account.

Apart from this, functions of some departments such as the construction of Bus Queue Shelters, Anganwadi Centres, maintenance of Sub-Health Centres and monitoring of Primary Schools along with funds have been delegated to the Zila Parishads. Besides this, to make the functioning of the PRIs more transparent and accountable, all development works of estimated cost more than Rs.5 lakh will be executed through the e-tender process only and monitor through the Rural Works Monitoring System. The government is committed to ensuring the vibrancy of the third tier of democracy in both letter and spirit. After educated PRIs in the State, empowerment the PRIs by transferring funds, works, and functionaries to them. The government is implementing various schemes for the upliftment of rural people. The thrust on empowering PRIs, sanitation, sustaining open defecation free (ODF) status, solid waste management, adding value to rural life, promoting entrepreneurship at the village level, improving rural infra and making urban local bodies more vibrant so that holistic development is not only guaranteed but is sustained as well. The efforts are being made to make PRIs self-reliant by devolving funds among Zila Parishads, Panchayat Samitis and Gram Panchayats in the ratio of 10:15:75 along with works and functionaries. This step will ensure an adequate amount of resources at their disposal. The Government is planning to promote PRIs to enhance their sources of revenue by giving them various powers of taxation such as a two per cent cess on electricity consumption bills.  A scheme to provide title deeds to residents living within ‘Lal Doras’ in rural areas has been successfully launched in the State. Nearly 400 villages have already been covered under this scheme.

Keeping in view the resource crunch in the economy, the conspicuous consumption at micro and macro levels should have been stopped. There is a need for sharing the responsibility calling for the pricing policy of public utilities to be linked with inflation. Puncher tires of the economy may be re-tired with the provisions in this budget. We can be hopeful for the things to take shape in the real sense by understanding and adopting the canons of public expenditure advocated by Dr B.R. Ambedkar that every Government should spend the resources garnered from the public not only according to rules, laws and regulations but should also see that ‘faithfulness, wisdom and Economy’ are adhered to in the acts of expenditure by the Govt. of Haryana.

We have to adopt a sustainable fiscal path for needed growth with infrastructure investments by keeping in mind the receipts that fall in the domain of needonomics required for atmanirbharta in Haryana.

* Former Vice-Chancellor at Jaipur and RGNIYD and Needonomist Professor living in Kurukshetra. Enjoy surfing the website www.needonomics.com

 

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