17
PUBLIC FINANCE 3Chapter
Public Finance management in the state continued to be
compliant with the mandates of APFRBM Act, 2005.
The Act stipulates that the State Government shall
maintain a revenue surplus in a financial year and ensure
that fiscal deficit does not exceed 3 per cent of GSDP.
During the financial year 2011-12, the State Government
took regular action to achieve the targets on fiscal reforms.
The state achieved revenue surplus and contained fiscal
deficit to well within the FRBM target of 3 per cent of
GSDP from the year 2006-07. The details of revenue
deficit / surplus and fiscal deficit from 2004-05 to 2012-
13 (RE) are shown in Chart-3.1.
Chart 3.1 : Revenue deficit / surplus and fiscal deficit
(Rs.Crore)
-2558
-64
159
1004
1230
2462
3138
1686
8192
8300
5643
8787
12406
14010
11803
15402
21129
-5000
0
5000
10000
15000
20000
25000
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
(RE)
Revenue deficit/surplus Fiscal Deficit
Source: Finance Department
The State Government made efforts to reduce revenue
expenditure and improve the revenues by plugging
loopholes in the collection of tax revenues. The revenue
collections were increased satisfactorily. But, the revenue
expenditure was increased to an extent of 15 per cent
during the year 2011-12 over 2010-11. The main reasons
for increase of revenue expenditure are increase in the
number of beneficiaries of scholarships and tuition fees
to the SCs / STs / BCs apart from Power Subsidy and
Rice Subsidy.
During the financial year 2012-13 (RE), own tax revenue
estimates at Rs.62,572 crore registered a growth rate
of 17.43 per cent over previous year. Similerly, non-tax
revenue estimates at Rs.12,864 crore registered a growth
rate of 10 per cent over the previous year. Revenue
expenditure at Rs.1,07,815 crore resulted in a revenue
surplus of Rs.1686 crore. Fiscal deficit estimates at
Rs.21,129 crore constitutes 2.46 per cent of GSDP.
Revenue Mobilization
Tax collections increased at 18.04 per cent during the
year 2011-12 over the year 2010-11 due to strengthening
of tax collection mechanism. The average rate of growth
of tax revenue stands during last 3 years at 17.27 per
cent. Compensation for loss to revenue on account of
phasing out of Central Sales Tax from Government of
India in the year 2011-12 was received for Rs.986 crore.
The growth in Non-tax revenue was also increased to an
extent of 9.08 per cent in the year 2011-12 over 2010-11.
Own Tax Revenues
The State’s own tax revenues grew by 18.04 per cent
in the year 2011-12 over the previous year 2010-11
and stood at Rs.53,283crore. Sales Tax, Excise, Motor
Vehicle Tax and Stamps and Registration contribute the
bulk of the Tax Revenues.
The Composition of the Own Tax Revenue during
2012-13 (RE) is depicted in Chart-3.2.
Chart 3.2: State's Own Tax Revenue
67%
17%
6%
8%
2%
Sales Tax Excise
Taxes on Motor Vehicles Stamps and Registration
Other Taxes and Duties
Source: Finance Department18
Own tax revenue from 2004-05 to 2012-13 (RE) is
shown in Chart-3.3 and the details of the composition
of own tax revenue are given in Annexure 3.1.
Chart 3.3: Own Tax Revenues (Rs.Crore)
28794
33358
35176
45140
53283
62572
0
10000
20000
30000
40000
50000
60000
70000
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
(RE)
Rs.Crore
Source: Finance Department
Own Non-Tax Revenue
The own non-tax revenue was increased to Rs.11,694
crore in the year 2011-12 where as the actuals for the year
2010-11 was Rs.10,720 crore. The major components
of State’s own non-tax revenue from 2004-05 to 2012-
13 (RE) are given in Annexure 3.2.
Central Transfers
The receipts under Central Tax Devolution for the
fiscal year 2011-12 stood at Rs.17751Crore, which is an
increase of Rs.2514 Crore over 2010-11. The flow of
Total Central resources to the State from 2004-05 to
2012-13 (RE) is given in Annexure 3.3.
Expenditure / Restructuring Expenditure
During the year 2011-12, capital expenditure constituted
17.01 per cent out of the total expenditure. Out of the
provision of Rs.21,428 crore made in 2011-12 (BE), the
capital expenditure including loans and advances was
Rs.18,540 crore. The major part of the capital expenditure
was allocated to irrigation sector, roads and bridges and
welfare sector. The State is continuously implementing
the schemes like subsidy rice, power subsidy, old age
pensions, pavala vaddi to SHGs, INDIRAMMA BATA,
Housing Programmes etc. The State is implementing
social sector schemes without hindrance in keeping view
the inclusiveness which are benefiting the people below
poverty line in the State.
The composition of total expenditure in 2011-12 is
depicted in Pie-Chart 3.4 and details of the expenditure
from 2001-02 to 2012-13 (RE) are given in Annexure 3.5.
Chart 3.4 : Composition of Expenditure -2012-13 (RE)
83%
14%
3%
Revenue Expenditure Capital Outlay Net lending
Source: Finance Department
Debt and Interest Payments
Interest payments against Government debt had gone
up from Rs.9675 crore in 2010-11 to Rs.10561 crores
in 2011-12. The interest payment during 2011-12
increased by 9.15 per cent over previous year. The
total outstanding debt by the end of March 2011-12
was Rs.1,35,646 crore, which comes to 20.70 per cent
of GSDP. The State Government is well within the
limits of the outstanding debt 27.6 per cent fixed in the
APFRBM Act. The Outstanding Central Loans as a
proportion of the total debt comprising 12.72 per cent
and market borrowings constitute another 55.35 per
cent. The composition of Outstanding Debt from 2001-
02 to 2012-13 (RE) is given in Annexure 3.7.
Fiscal Deficit
In the year 2011-12, the actual percentage of fiscal
deficit to GSDP is at 2.35 per cent. Thus, the State
Government is within the target percentage of fiscal
deficit limits (3 per cent) prescribed by Government
of India.
The Interest Payments and Fiscal Deficit from 2004-05
to 2012-13 (RE) are given in Annexure-3.6.
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