Hyderabad, January 22:: Faced with a severe fund crunch and spiraling expenditure, the State government is likely to present a ‘zero-based’ budget for the year 2011-12. It is also looking to the Central government to shoulder part of its financial burden as its countless welfare schemes and commitments are proving to be a real challenge.
Finance Minister A Ramanarayana Reddy is expected to table the budget in the Assembly in the third week of February. Though there is no announcement, officials in the finance department said the government had no other option but to go in for a zero-based budget __ which calls for justification of every penny that is spent unlike the previous year when money was splurged on different ventures. In case, the government opts for a normal budget, it has to increase the size of the budget from Rs 1.13 lakh crore.
But, the officials said, this would cause more problems given the huge mismatch between revenue receipts and expenditure during the current financial year itself.
According to them, the government is unable to release funds for various programmes on time due to the mismatch between income and expenditure. The State government earned Rs 33,410 crore as against the revenue target of Rs 35,694 crore till December 31, 2010. The target for the financial year 2010-11 is Rs 43,000 crore of which about Rs 32,000 crore accounts for salaries alone.
“Financial assistance from the Centre in the form of grants and loans is also not encouraging. To avoid such a situation, there is no other option but the zero-based budget,” said a senior official in the finance department.
A vote-on-account, instead of a budget, is also under consideration but it is being ruled out as the government needs to show a specific reason like elections for it.
Though revenue receipts up to December 31, 2010 increased by 27 per cent when compared to last year, unexpected expenditure like financial assistance to flood-hit farmers and Pay Revision Commission for State government employees caused a severe financial crisis. Finance Minister A Ramanarayana Reddy, who attended the meeting of a Chief Ministers and Finance Ministers from all States in New Delhi recently, requested the Centre to bear expenditure for schemes like pensions and Aarogyasri.
–Agencies