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A Positive Budget

Faced with the challenge of collecting enough revenue, burdened with gargantuan debt, saddled with rudimentary infrastructure and entrepreneurial base — the Sarbanda Sonowal government deserves some credit for giving a tax break to the people in its first full budget. ysayers may well point to the hiking of VAT rates and partial withdrawal of fuel subsidy last year soon after this government had taken over, but it needed to be seen giving some relief this time around to the people hit by cash ban and depressed business sentiment. Desisting from levying any new tax, Fince minister Himanta Biswa Sarma has chosen to give special relief to tourism industry by exempting hotels and lodging houses from luxury tax, to multiplexes and cinema halls screening regiol films from entertainment tax, and to small tea growers by reducing cess on green tea leaf. A price stabilization fund of Rs 150 crore has been proposed under the Food and Civil Supplies department to check sudden rise in prices of essential commodities. It remains to be seen whether it will be incentive enough for this department to intervene proactively in the market; its lethargy has long been a bane for consumers in the State long at the mercy of syndicates and hoarders. Building on the BJP’s vision document, the budget theme of ‘Resurgent Assam’ seeks to leverage six strategies — toning up public fincial magement, widening fincial inclusion, boosting public infrastructure, upping rural development and employment generation, welfare of farmer-youth-women-differently-abled, and economic & cultural reissance. Key initiatives like Rs 1 lakh credit support for 1 lakh youths to start enterprises, Rs 5 lakh support for 1 lakh women’s self-help groups, zero percent crop loans for farmers, Rs 667 crore over 3-4 years to develop 31 professiol colleges and varsities, and fincial inclusion of tea workers — if implemented properly, have the potential to kick-start economic activities at the grassroots level. Like the micro-credit movement, such initiatives need to be nursed and monitored carefully so that the expected multiplier effect materializes. With Guwahati already set for infrastructure upgrade under Smart City mission, the State budget has targeted six other cities Silchar, Tezpur, gaon, Jorhat, Sivasagar and Tinsukia as growth centers, while adding its bit to offer Rs 50,000 subsidy to targeted beneficiaries in eight cities covered under the Prime Minister’s housing scheme (PMAY).      

However, it is the budgeting exercise itself that has seen significant changes, advanced to February 7 this year after a consultative process involving MLAs and seeking feedback from civil society groups, various stakeholders and members of the public. A series of better housekeeping practices have been incorporated in line with what the rendra Modi government has been doing at the Centre. These include revamping the Excise and Treasury Rules, ratiolizing the system of retention of posts, paying salaries to muster roll and work change along with regular employees under ‘Establishment Expenditure’ head, expediting departmental ceilings by cutting red tape and going online, re-defining the role and reming Planning & Development Department as well as the State Planning Board, and identifying specific sectors for revival mely tea industry, sick industries, sustaible magement of Brahmaputra and skill development. The Fince Minister mentioned that a new mechanism will be worked out to devolve plan funds to Karbi Anglong, Dima Hasao and BTC — the sooner this is done, the better, considering how fund leakage and chronic lack of development have stoked militancy in these tribal autonomous councils. The budget has made provisions to implement the Seventh Pay Commission recommendations for paying out higher salaries and arrears to State government employees, as well as offering them housing and education loans at low interest. The question is — can the State government now get its employees to honestly and diligently work to implement schemes for the welfare of other sections?  To cover revenue shortfall, the Fince Minister is pinning hope on getting more outstanding crude oil royalty at pre-discounted prices — to the tune of Rs 7,000 crore in the coming days (to add to Rs 1,450 crore received last year). But he will have to be on the lookout for more sources of revenue to mop up in the coming days.

About the author

Ankur Kalita