Haryana Government on Monday released its white paper on State’s financial position, giving a possible indication of what to expect from the upcoming State Budget.
Coming out with a white paper, a week prior to the beginning of Budget Session of Haryana Assembly, the BJP Government presented financial figures claiming that it has inherited an ailing and debt-laden economy with coffers virtually empty.
The white paper (part 1) presented the financial position of the State elaborating figures on GSDP/GDP growth, per capita income, unemployment rate, Human development index (HDI), revenue receipts, public debt, revenue deficit, trends in fiscal deficit/surplus among other factors. It also drew comparison between the financial figures of various sectors in past one decade during the previous Congress Government’s rule in Haryana.
Charging the Bhupinder Singh Hooda’s Government with lack of governance, Chief Minister Manohar lal while addressing a Press conference on Monday said the BJP-led State Government has inherited a shattered economy and near-empty coffers. The unplanned and unproductive spendings by the previous Congress Government has reduced Haryana from a revenue-surplus to a revenue-deficit State.
The Chief Minister rebutted claims made by Congress Government of “Number one Haryana” saying that the State today ranks at tenth position in the country as per the average growth recorded during the period 2005-06 to 2013-14 which was 8.5 in Haryana, much lower than the average growth rate.
Manohar lal also highlighted the poor financial position of the State presenting digits related to outstanding debt liabilities, shortfall and slow growth in revenue receipts, negative growth in primary sector among others.
The ultimate goal, the Chief Minister, said is to make people aware of the actual fiscal health of the State and apprise them about the financial strengths and weaknesses of the economy with focus on the period between 2004-05 and 2013-14. Besides, the white paper would also contribute in framing the future policies for the State.
Adding to this, Haryana Finance Minister Capt Abhimanyu said, “The aim of releasing the white paper is not to criticise the previous Congress Government but to place in the public domain various facets and the real picture about State financial position.”
Besides presenting the financial facts and figures, the State Finance Minister quoted the line Aamdani Atthani Kharcha Rupaiya referring to the more spending than earnings by the previous State Government.
As per the mandate of the 13th Finance Commission, the State was to achieve a zero revenue deficit from the year 2011-12 onwards, which has not been met. From imbalance development to huge debts liabilities, the poor governance and policy decisions by the Congress Government has led to a topsy-turvy situation in the State,” he added
“Ek Haryana mein anek Haryana”, said the Minister referring to imbalanced development in the State and while quoting the figures related to per-capita income of the State which stands highest at Rs4,46,305 in Gugaon and lowest at Rs45,939 in Mewat in 2011-12.
Delivering a conclusion, the State Finance Minister said that diversification of agriculture and improving of workforce engaged in the primary sector becomes the top imperative now. Also, steps would be taken to boost the growth rate in the primary sector. All these factors would be given priority in the State Budget 2015-16.
He said, “Apart from this, the skewed distribution of State resources in the previous Government regime needs a course correction now to ensure overall development of the State. Haryana’s locational advantage would be leveraged to give impetus to the lagging industrial sector. Declining GSDP in the past decade also requires to be arrested.”
“As suggested by the white paper, the previous Government discriminated while allocated resources for different district of Haryana. The BJP led state Government would ensure balanced resources allocation in the next Budget,” he added.
The second part of white part on State finances would be released soon in which the fiscal health of public sector undertaking is being highlighted.
State’s Gross Domestic Product
The fiscal deficit which worked out to 1.26 per cent of GSDP in 2004-05 rose sharply to 4.51 per cent in 2009-10 but declined to 2.12 per cent in 2013-14, that too due to deferment of huge liabilities. The white paper, prepared by the State Government, revealed that for three years, 2005-06 to 2007-08, the State was revenue surplus after which it became revenue-deficit. From a revenue surplus of Rs1,213 crore in 2005-06, the State had a revenue deficit of Rs3,875 crore in 2013-14. And the deficit kept increasing year-on-year except for a marginal decline in 2010-11, 2011-12 and 2013-14. This marginal bucking of the trend in 2013-14 was due to deferment of large liabilities to the next fiscal year. In 2004-05, fiscal deficit aggregated Rs1,206 crore, which increased significantly to Rs8,314 crores in 2013-14. The percentage of tax revenue to GSDP declined from 7.8 per cent in 2004-05 to 6.6 per cent in 2013-14.
Haryana’s public debt
While loans shot up from Rs4,474 crore in 2004-05 to Rs17,713 crore in 2013-14, outstanding debt liabilities zoomed from Rs23,320 crore in 2004-05 to Rs71,305 crore in 2013-14. Resultantly, interest payments also shot up both in absolute terms as well as a percentage of total revenue expenditure. Interest payments increased by more than 260 per cent from Rs2,235 crore in 2004-05 to Rs5,850 crore in 2013-14. The contingent liabilities of the state which aggregated Rs4,209 crore in 2004-05 increased to Rs27,306 crore in 2013-14, representing 650 per cent increase in contingent liabilities in the last ten years.
Disparity in per capita income
In 2004-05, the ratio of per capita income between the richest and poorest districts was 3.7 which was jumped to 9.7 in 2011-12. Six districts registered per capita income above the state average while 15 other districts saw PCI below the state average of Rs1,06,358 in 2011-12. The per capita income of Gurgaon district which was Rs81,478 in 2004-05, increased to Rs4,46,305 in 2011-12. The per capita income of Yamunanagar increased from Rs32,038 in 2004-05 to Rs82,232 in 2011-12. Similarly, in Mahendergarh, it increased from Rs21,888 in 2004-05 to Rs54,835 in 2011-12. But the per capita income of district Mewat in 2011-12 was only Rs45,934, the lowest in the entire state.
Revenue receipts
The State’s own revenue as a share of total revenue declined from 89.5 per cent in 2004-05 to 80.4 per cent in 2013-14. On the contrary, the share of Central grants in total receipts which was 4.9 per cent in 2004-05 soared to 10.9 per cent in
2013-14. The major component of State’s own revenues is tax revenue, where the share has remained stagnant and flat at about 67 per cent. Further, in its own kitty, the share of non-tax revenue declined from 22.8 per cent in 2004-05 to 13.1 per cent in 2013-14.
The percentage of tax revenue to GSDP declined from 7.8 per cent in 2004-05 to 6.6 per cent in 2013-14. Even if it had been sustained at the same level, the state would have earned additional revenue of Rs20,000 crore.
Structural composition of the economy-contribution to GSDP/GDP
The primary sector (agriculture and allied sector) in Haryana contributed only 15.3 per cent to the State GDP in 2013-14, albeit, it employed 51.3 per cent of the work force. The share of industrial sector to GSDP which increased from 20.5 per cent in 1966-67 to 32.7 per cent in 2004-05, declined to 27.7 per cent in 2013-14. During the decade, the manufacturing sector recorded a rate of growth lower than the national average in six of the ten years.
Human development index value
In terms of the HDI, Haryana has slipped two places down to the ninth position in 2007-08 from the seventh position in 1999-2000. Though Haryana’s HDI value improved from 0.501 in 1999-2000 to 0.5552 in 2007-08, the other states performed better during this period.
Unemployment rate
The rural unemployment rate of 5.1 per cent in 2013-14 in Haryana remains higher than the all India average of 4.7 per cent. The unemployment rate of female is 8 per cent while it is 4.3 per cent of male in Haryana. As per the all India average, the female and male unemployment rate is 7.7 and 4.1 per cent respectively.