Saturday, March 10, 2001,
Chandigarh, India


M A I N   N E W S

No fresh taxes in Himachal Budget
Tribune News Service

Shimla, March 9
Loans worth Rs 2318 crore will be raised by Himachal Pradesh in the coming financial year to meet the Budget proposals of Rs 5659 crore which were presented by the Chief Minister, Mr P.K. Dhumal, in the Vidhan Sabha today.

A total deficit of Rs 162.70 crore has been anticipated in the Budget which proposes no fresh taxes.

The Budget proposes a revenue expenditure of Rs 4718.63 crore.

Mr Dhumal announced an increase of Rs 4 in the minimum daily wages, enhancing it to Rs 55. The increase will be applicable from August 1, 2001.

He also announced lifting of the ban on private practice by doctors of the Health, Ayurveda and Veterinary Departments to save an amount of Rs 8 crore which was being paid to them as non-practising allowance.

He announced an increase in the upper age limit for joining government service from 40 to 45 with effect from April 1, 2001.

The Chief Minister announced that in order to enable the farmers of lower areas of the state to derive full value for their khair produce, all restrictions on trade and export of khair wood would be lifted with effect from December 1, 2001.

A 25 per cent hike in the special compensatory allowance to armed police personnel was announced with effect from August 1, 2001.

To meet the long-standing demand of panchayat chowkidars, Mr Dhumal announced an enhancement of their monthly remuneration from Rs 400 to Rs 500 and an increase in their fee from summon service from Rs 3 to Rs 5.

In his tax rationalisation exercise on various items, Mr Dhumal proposed to exempt the eight per cent sales tax on kerosene lanterns and wick burning stoves largely used by the poor in rural areas.

He proposed a uniform sales tax of eight per cent on steel and wood furniture and wristwatches and clocks by cutting it down from 12 per cent. The sales tax on dhoop and agarbatti was proposed to be cut to two per cent from the existing four per cent and the sales tax on electrical goods and appliances would be reduced to eight per cent from 12 per cent.

The sales tax on arms and ammunition was proposed to be increased to 20 per cent from the existing 15 per cent.

In a bid to give a fillip to entertainment and tourism-related facilities, Mr Dhumal announced a 10-year tax holiday under a new Act expected to be introduced during this session. It would result in reduction of the annual revenue by Rs 1 crore.

To relieve tourists and motorists of the nuisance of tax barriers on highways and bridges, Mr Dhumal announced that all barriers would be removed from April 1 as these had become a major obstacle in the orderly movement of traffic.

Powers conferred on urban bodies to levy entry tax on vehicles would be withdrawn and the toll tax on various bridges abolished. An appropriate proposal would be brought for a one-time entry tax on the borders of the state.

The Chief Minister indicated that some bold initiatives on the fiscal and administrative front shall have to be taken because of the difficult financial situation.

Mr Dhumal’s Budget estimates contain a provision of Rs 4718.63 crore as revenue expenditure. Of this amount, Rs 3624.25 crore is for non-Plan purposes, Rs 976.70 crore for the Plan and the balance for centrally sponsored schemes.

Revenue receipts to meet this expenditure are estimated at Rs 3215.97 crore and include Rs 959.17 crore of the state’s own receipts of both tax and non-tax nature and Rs 2141.74 crore as Central transfers on account of the Eleventh Finance Commission recommendations as well as Central assistance for the state Plan.

The Chief Minister said in effect, “we have a revenue deficit of Rs 1502.66 crore which amounts to 10.9 per cent of the estimated state domestic product in 2001-02.”

He warned that a fall of four per cent in the revenue deficit within a year was illustrative of “our extremely serious financial situation. A reduction in revenue expenditure will be accorded the highest priority by the government in the coming years.”

He said the revenue deficit and the capital expenditure were proposed to be financed through borrowings of Rs 2317.93 crore and recovery of loans worth Rs 24.41 crore advanced by the state government.

The Chief Minister said the committed expenditure in the Budget was estimated at 81.18 per cent. This included salaries 34.04 per cent, interest payments 24.69 per cent, pensions 8.13 per cent, maintenance 5.14 per cent, loan repayments and advances 6.09 per cent and grants-in-aid 3.09 per cent.

He announced that the strength of the all-India services, including IAS, IPS and IFS, would be reduced by at least 15 per cent in the coming five years. The process of reducing the all-India cadre posts would begin immediately by minimal replacement against envisaged retirements. Only a fresh incumbent in these cadres would be taken from the Centre each year.

Mr Dhumal said major administrative reforms shall have to be carried out by introducing the single-file system for departments, merger of departments with similar objectives and hastening the movement in the direction of public sector reforms.


TMC reaches pact with AIADMK

Chennai, March 9
The Tamil Maanila Congress (TMC)-Congress combine today reached an agreement on an alliance with the All-India Anna DMK-led Secular Front for the coming Assembly elections.

“The agreement has been clinched,’’ announced TMC spokesman B.S. Ganandesikan.

The details of seat-sharing would be announced at a press conference tomorrow, he said.

The agreement was reached after day-long negotiations which concluded with a personal meeting between TMC President G.K. Moopanar and AIADMK General Secretary J. Jayalalitha at her Poes Garden residence late tonight.

It was not immediately clear whether the dispute over Pondicherry where the Congress and the PMK laid claim for Chief Ministership was delinked from the agreement.

TMC sources said the final deal for the two parties could be between 45 and 50 seats, most probably 47.

Earlier indications said Ms Jayalalitha was inclined to give 50 seats to the TMC-Congress combine if Pondicherry was not delinked from the alliance.

Ms Jayalalitha had already given 10 of the 30 seats in Pondicherry to the PMK and with it the Chief Ministership for the first two and half years if the alliance won.

She had agreed to give the Chief Ministership for the next two and half years by rotation to the Congress. But, the latter had declared that it would not share power with the PMK.

The dispute over the number of seats had remained unresolved till this evening. Dravidar Kazhagam General Secretary K. Veeramani and Tamil Nadu Social Justice Party President Jagaveerapandyan held prolonged discussions with Mr Moopanar apparently on behalf of Ms Jayalalitha and a personal meeting between Ms Jayalalitha and Mr Moopanar was fixed then.

Ms Jayalalitha had earlier committed herself to allot 45 seats to the TMC Congress(I) combine. UNIBack

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