Himachal Pradesh Chief Minister Prem Kumar Dhumal presented the budget for 2012-13

Himachal Pradesh Chief Minister Prem Kumar Dhumal on 19 March 2012 presented his fifth budget in the State Assembly. This was the longest budget speech in the history of Himachal Pradesh Vidhan Sabha. The 82 page speech lasted for two hours and twenty minutes.

The gross budget outlay for financial year 2012-13 was estimated at 20243.93 Crore rupees out of which 6285.10 Crore rupees would be spentexpend on salaries, 2784.71 Crore rupees on Pensions, 2249.67 Crore rupees to remit interest payments and 1937.30 Crore rupees for repayment of loan and 1567.55 Crore rupees on maintenance.

The budget estimated the total revenue receipts for 2012-13 at 16342.98 Crore rupees and the total revenue expenditure at 15969.19 Crore rupees marking a revenue surplus of 373.79 Crore rupees. The expected receipts in the capital account of the government are 3331.59 Crore rupees apart from 650 Crore rupees in public accounts including Provident funds etc. Capital expenditure including loan repayments is estimated to be 4274.73 Crore rupees.

The fiscal deficit for 20121-13 is expected to be 1939.35 crore rupees which is 2.88 percent of GDP. Dhumal pegged the 2012-13 annual plan at 3700 crore rupees, which is 12 per cent higher than last year. The budget estimates that for an expenditure of every 100 rupees the state would have 80.73 rupees as total revenue receipts including transfers from the centre. The gap of 19.27 rupees would be met with borrowings.

Out of every 100 rupees of state revenue receipts 30.95 rupees would accrue from the states own tax revenues, 12.25 rupees from non-tax revenue, 14.52 rupees from share in central taxes and 42.28 rupees from central grants. Out of every 100 rupees expenditure salaries would account for 31.05 rupees, Pension 13.76 rupees, interest of payments for 11.11 rupees, loan repayments for 9.57 rupees and remaining 34.51 rupees would be spent on developmental work including other activities.

Some of the major highlights of the budget are:

•    To facilitate the traders entry tax on non-ferrous metals would be reduced from existing rate of ½ percent to ¼ percent.

•    To check the use of tobacco in the state, VAT on cigarettes and other tobacco products would be increased to 18 percent from 16 percent and on ‘bidis’ from 9.75 percent to 11 percent.

•    The MLA local area development fund will be increased from 30 lakh to 50 lakh rupees and MLAs will be authorised to sanction schemes anywhere within the district.

•    To promote tourism in remote areas in the state, the budget exempted luxury tax on all new hotels for a period of 10 years from the date the hotel commissioning.

•    Financial year 2012-13 being the first year of the 12th five year plan, the State Government has proposed a total outlay of 22800 crore rupees for the 12th plan to the Planning Commission, which is an increase of 65 percent over the 11th Plan.

•    The State Government also announced the release of 7 percent Dearness Allowance to employees which would further burden the state exchequer to 340 Crore rupees. In addition the minister announced to release balance of arrears of salary to the pensioners in April 2012.

•    Government also annouced to increase the social security pensions from 330 to 400 rupees per month. The pension for elderly who have attained the age of 80 with now be 600 rupees per month.

•    Panchayat Chowkidards and Anganwari workers to get more honorarium