The Finance Minister of Assam, Dr. Himanta Biswa Sarma, presented the Budget for financial year 2018-19 on March 12, 2018.
Budget Highlights
- The Gross State Domestic Product of Assam for 2018-19 (at current prices) is estimated to be Rs 3,32,939 This is 28.9% higher than the budget estimate for 2017-18.
- Total expenditure for 2018-19 is estimated to be Rs 90,270 crore, a 9.2% decrease over the revised estimate of 2017-18. In 2017-18, the revised estimates indicate that the expenditure is expected to be Rs 13,530 crore higher (15.7%) than the budget estimate.
- Total receipts (excluding borrowings) for 2018-19 are estimated to be Rs 76,665 crore, an increase of 13.4% as compared to the revised estimates of 2017-18. In 2017-18, total receipts (excluding borrowings) are expected to be lower the budgeted estimate by Rs 15,420 crore (21%).
- Revenue surplus for the next financial year is targeted at Rs 2,789 crore, or 0.84% of the Gross State Domestic Product (GDP). Fiscal deficit is targeted at Rs 9,774 crore (2.94% of GSDP).
- Department of Water Supply and Sanitation is expected to witness a 57.8% increase in allocation. It is followed by the departments of Agriculture (26.7%), Education (22.6%), and Roads and Bridges (20.7%).
Policy Highlights
- Rs 1,080 crore has been allocated across two years for upgrading seven government medical colleges and 11 district hospitals in cancer care by 2019 in partnership with Tata Trust.
- Rs 177.5 crore has been allocated to Bodoland Territorial Council as per the recommendations of the Assam State Finance Commission.
- A bridge over Brahmaputra connecting Panbazar with North Guwahati will be constructed with a cost of Rs 1,890 crore over a period of four years, and it will be funded by the New Development Bank.
- Tax proposals: Cess on green tree leaves has been completely exempted from the current 10 paise per kg. Exemption limits under the Agriculture Income Tax Act has been raised up to Rs 2.5 lakh from the current exemption limit of Rs one lakh.
|
Assam Economy
|
Figure 1: Growth in GSDP and sectors (2011-12 prices) Note: Agriculture includes mining. Manufacturing includes construction and electricity. Services includes trade, transport, and financial services. Sources: GSVA by Economic Activities, Central Statistics Office; PRS. |
Budget Estimates for 2018-19
- The total expenditure in 2018-19 is targeted at Rs 90,270 crore. This is 9.2% lower than the revised estimates of 2017-18. This expenditure is proposed to be met through receipts (other than borrowings) of Rs 76,665 crore and borrowings of Rs 14,008 crore. In 2017-18, revised estimates of total expenditure are 15.7% higher (Rs 13,530 crore) than the budget estimates.
- Total receipts for 2018-19 (other than borrowings) are expected to be 13.4% higher than the revised estimates of 2017-18.
Table 1: Budget 2018-19 - Key figures (Rs crore)
|
Items |
2016-17 Actuals |
2017-18 Budgeted |
2017-18 Revised |
% change from BE 2017-18 to RE 2017-18 |
2018-19 Budgeted |
% change from RE 2017-18 to BE 2018-19 |
|
Total Expenditure |
57,407 |
85,923 |
99,453 |
15.7% |
90,270 |
-9.2% |
|
A. Borrowings* |
3,902 |
11,265 |
12,354 |
9.7% |
14,008 |
13.4% |
|
B. Receipts (except borrowings) |
49,238 |
73,467 |
58,047 |
-21.0% |
76,665 |
13.4% |
|
Total Receipts (A+B) |
53,140 |
84,732 |
70,401 |
-16.9% |
90,673 |
28.8% |
|
Revenue Deficit (-)/ Surplus (+) |
-143 |
2,400 |
-23,352 |
-1073.1% |
2,789 |
-111.9% |
|
As % of state GDP |
-0.06% |
0.93% |
-9.04% |
- |
0.84% |
- |
|
Fiscal Deficit (-)/ Surplus (+) |
-6,126 |
-7,702 |
-41,939 |
444.5% |
-9,774 |
-76.7% |
|
As % of state GDP |
-2.73% |
-2.98% |
-16.23% |
- |
-2.94% |
- |
|
Primary Deficit (-)/ Surplus (+) |
-3,162 |
-3,956 |
-38,192 |
865.5% |
-5,581 |
-85.4% |
|
As % of state GDP |
-1.41% |
-1.53% |
-14.78% |
- |
-1.68% |
- |
Notes: BE is Budget Estimate; RE is Revised Estimate. ‘-’ sign indicates deficit; ‘+’ indicates surplus. Total expenditure is the sum of revenue expenditure and capital expenditure. GSDP for 2017-18 BE and 2017-18 RE is taken as Rs 2,58,337 crore.
Fiscal deficit = (Revenue receipts + Recovery of loans) – (Revenue expenditure + Capital outlay + Loans provided by the state).
Sources: Assam Budget Documents 2018-19; PRS.
Expenditure in 2018-19
- Capital expenditure for 2018-19 is proposed to be Rs 18,941 crore, which is a decrease of 6.2% over the revised estimates of 2017-18. This includes expenditure which affects the assets and liabilities of the state, and leads to creation of assets (such as bridges and hospital), and repayment of loans, among others. Note that capital expenditure in 2017-18 is expected to be Rs 2,593 crore more than the budget estimates.
- Revenue expenditure for 2018-19 is proposed to be Rs 71,329 crore, which is a decrease of 10% over the revised estimates of 2017-18. This expenditure includes payment of salaries and pensions, and maintenance of existing infrastructure. In 2017-18, revenue expenditure is expected to be Rs 10,937 crore (16%) more than the budget estimates.
- In 2018-19, Assam is expected to spend Rs 8,024 crore on servicing its debt (i.e., Rs 3,830 crore on repaying loans, and Rs 4,193 crore on interest payments). Debt servicing is 5% lower than the revised estimates of 2017-18.
Table 2: Expenditure budget 2018-19 (Rs crore)
|
Item |
2016-17 Actuals |
2017-18 Budgeted |
2017-18 Revised |
% change from BE 2017-18 to RE 2017-18 |
2018-19 Budgeted |
% change from RE 2017-18 to BE 2018-19 |
|
Capital Expenditure |
8,044 |
17,603 |
20,197 |
14.7% |
18,941 |
-6.2% |
|
Revenue Expenditure |
49,363 |
68,319 |
79,257 |
16.0% |
71,329 |
-10.0% |
|
Total Expenditure |
57,407 |
85,923 |
99,453 |
15.7% |
90,270 |
-9.2% |
|
A. Debt Repayment |
2,043 |
4,703 |
4,703 |
0.0% |
3,830 |
-18.6% |
|
B. Interest Payments |
2,964 |
3,747 |
3,747 |
0.0% |
4,193 |
11.9% |
|
Debt Servicing (A+B) |
5,006 |
8,450 |
8,450 |
0.0% |
8,024 |
-5.0% |
Note: Total expenditure is the sum of revenue expenditure and capital expenditure.
Sources: Assam Budget Documents 2018-19; PRS.
Sector expenditure in 2018-19
The departments listed below account for 48% of the total budgeted expenditure of Assam in 2018-19. A comparison of Assam’s expenditure on key sectors with 18 other states can be found in the Annexure.
Table 3: Department-wise expenditure for Assam Budget 2018-19 (Rs crore)
|
Department |
2016-17 |
2017-18 |
2018-19 |
% change from RE 2017-18 to BE 2018-19 |
Budget provisions for 2018-19 |
|
Actuals |
Revised |
Budgeted |
|
||
|
Education |
11,100 |
14,271 |
16,161 |
22.64% |
|
|
Police |
2,922 |
5,135 |
5,103 |
10.25% |
|
|
Health |
2,978 |
5,451 |
5,081 |
9.65% |
|
|
Roads and Bridges |
3,546 |
4,259 |
4,649 |
20.77% |
|
|
Rural Development |
2,263 |
4,205 |
3,685 |
-8.05% |
|
|
Water Supply and Sanitation |
1,909 |
2,671 |
2,662 |
57.83% |
|
|
Social Security, Welfare, and Nutrition |
957 |
1,865 |
2,099 |
19.76% |
|
|
Agriculture |
742 |
1,893 |
1,743 |
26.77% |
|
|
Welfare of SC/ST/OBC |
625 |
1,398 |
1,380 |
4.38% |
|
|
Water Resources |
722 |
2,739 |
825 |
-69.71% |
|
|
% of total expenditure |
48% |
44% |
48% |
- |
|
Source: Assam Budget Documents and Budget Speech 2018-19; PRS.
Receipts in 2018-19
|
In 2016-17, the actual total capital receipts of the state saw a decline of Rs 7,323 crore (65%) from the budgeted estimates. The revenue receipts saw a decline of Rs 16,960 crore (25.6%). In 2016-17, grants-in-aid from the centre were lower than budgeted by Rs 13,162 crore (51%). Borrowings were also less than estimated by Rs 6,772 crore (63.4%). |
- The total revenue receipts for 2018-19 are estimated to be Rs 74,119 crore, an increase of 32.6% over the revised estimates of 2017-18. Of this, Rs 25,643 crore (35% of the revenue receipts) will be raised by the state through its own resources, and Rs 48,476 crore (65% of the revenue receipts) will be devolved by the centre in the form of grants and the state’s share in taxes.
- Non-Tax Revenue: Assam has estimated to generate Rs 8,192 crore through non-tax sources in 2018-19. This is an increase of 27.8% over the revised estimates of 2017-18.
Table 4: Break up of state government receipts 2018-19 (Rs crore)
|
Item |
2016-2017 Actuals |
2017-2018 Budgeted |
2017-18 Revised |
% change from BE 2017-18 to RE 2017-18 |
2018-2019 Budgeted |
% change from RE 2017-18 to BE 2018-19 |
|
State's Own Tax |
12,080 |
16,434 |
12,043 |
-26.7% |
17,451 |
44.9% |
|
State's Own Non-Tax |
4,353 |
7,464 |
6,409 |
-14.1% |
8,192 |
27.8% |
|
Share in Central Taxes |
20,189 |
25,651 |
20,025 |
-21.9% |
26,096 |
30.3% |
|
Grants-in-aid from Centre |
12,598 |
21,170 |
17,428 |
-17.7% |
22,380 |
28.4% |
|
Total Revenue Receipts |
49,220 |
70,719 |
55,905 |
-20.9% |
74,119 |
32.6% |
|
Borrowings |
3,902 |
11,265 |
12,354 |
9.7% |
14,008 |
13.4% |
|
Other receipts |
19 |
2,747 |
2,142 |
-22.0% |
2,547 |
18.9% |
|
Total Capital Receipts |
3,920 |
14,013 |
14,496 |
3.5% |
16,555 |
14.2% |
|
Total Receipts |
53,140 |
84,732 |
70,401 |
-16.9% |
90,673 |
28.8% |
Sources: Assam Budget Documents 2018-19; PRS.
|
The tender fee in case of contracts is being increased from Rs 8.25 to Rs 100 for tenders up to Rs 20 lakh, and Rs 500 for tenders beyond Rs 20 lakh. The stamp duty and registration fee for transactions in immovable properties is proposed to be increased by 1% over the prevailing rates. |
- Tax Revenue: Total own tax revenue of Assam is estimated to be Rs 17,451 crore in 2018-19. The composition of the state’s tax revenue is shown in Figure 2.
|
Figure 2: Composition of Tax Revenue in 2018-19 (BE) |
|
- Taxes on vehicles will contribute Rs 737 crore, an increase of 29% over the revised estimates of 2017-18. Stamp duty will contribute Rs 274 crore and land revenue will contribute Rs 254 crore, an increase of 10% over the revised estimates of 2017-18.
- About 2% of the tax revenue will be generated through taxes on electricity, goods and passengers, and other taxes and duties.
Deficits, Debts and FRBM Targets for 2018-19
The Assam Fiscal Responsibility and Budget Management Act, 2005 provides annual targets to progressively reduce the outstanding liabilities, revenue deficit, and fiscal deficit of the state government.
|
Debt as a percentage of GSDP has increased in the last two years. It increased from 17.1% in 2016-17 to 17.6% in 2018-19 |
Revenue surplus: It is the excess of revenue receipts over revenue expenditure. A revenue surplus implies that the government is not required to borrow in order to finance its expenses which do not create capital assets.
The budget estimates a revenue surplus of Rs 2,789 crore (0.8% of GSDP) in 2018-19. This implies that revenue receipts are expected to be higher than the revenue expenditure, resulting in a surplus. The 14th Finance Commission had recommended that states should eliminate revenue deficits. The estimates in the Assam Budget 2018-19 suggest that the state is expected to achieve this target of eliminating revenue deficit.
Fiscal deficit: It is the excess of total expenditure over total receipts. This gap is filled by borrowings by the government, and leads to an increase in total liabilities. In 2018-19, fiscal deficit is estimated to be Rs 9,774 crore, (2.9% of the GSDP). This estimate is under the 3% limit prescribed by the 14th Finance Commission.
Outstanding Liabilities: It is the accumulation of borrowings over the years. In 2018-19, the outstanding liabilities are expected at 17.6% of the GSDP.
Table 5: Budget targets for deficits for Assam 2018-19 (% of GSDP)
|
Year |
Revenue |
Fiscal |
Outstanding Liabilities |
|
Deficit (-)/Surplus (+) |
Deficit (-)/Surplus (+) |
||
|
2016-17 |
-0.06% |
-2.7% |
17.1% |
|
RE 2017-18 |
-9.0% |
-16.2% |
17.7% |
|
BE 2018-19 |
0.8% |
-2.9% |
17.6% |
|
2019-20 |
-0.02% |
-2.1% |
16.6% |
|
2020-21 |
-0.01% |
-2.4% |
15.6% |
Sources: Assam Budget Documents 2018-19; PRS.
Figures 3 and 4 show the trend in deficits and outstanding liabilities targets from 2016-17 to 2020-21.
|
Figure 3: Revenue and Fiscal Deficit (as % of GSDP)
Note: Figures for 2019-20 and 2020-21 are projections. Sources: Assam Budget Documents; PRS. |
Figure 4:Outstanding liabilities targets (as % of GSDP) Note: Figures for 2019-20 and 2020-21 are projections. Sources: Assam Budget Documents; PRS. |
Annexure
The graphs below compare Assam’s expenditure on four key sectors as a proportion of its total budget, with 18 other states.[1]
- Education: Assam has allocated 17.9% on education in 2018-19. This is higher than the average expenditure allocated to education by 18 other states (using 2017-18 BE).
- Health: Assam has allocated 5.6% of its total expenditure on health, which is higher than the average expenditure of 18 other states.
- Agriculture: The state has allocated 1.9% of its total budget on agriculture. This is significantly lower than the allocations of 18 other states (6.4%).
- Rural development: The state has allocated 4.1% of its expenditure on rural development. This is lower than the average (5.6%) of 18 other states.
Note: 2017-18 (BE), 2017-18 (RE), and 2018-19 (BE) figures are for the state of Assam.
Source: Annual Financial Statement (2017-18 and 2018-19), various state budgets; PRS.
[1] The 18 states apart from Assam are: Andhra Pradesh, Bihar, Chhattisgarh, Delhi, Gujarat, Haryana, Jammu and Kashmir, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Odisha, Punjab, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh, and West Bengal.
DISCLAIMER: This document is being furnished to you for your information. You may choose to reproduce or redistribute this report for non-commercial purposes in part or in full to any other person with due acknowledgement of PRS Legislative Research (“PRS”). The opinions expressed herein are entirely those of the author(s). PRS makes every effort to use reliable and comprehensive information, but PRS does not represent that the contents of the report are accurate or complete. PRS is an independent, not-for-profit group. This document has been prepared without regard to the objectives or opinions of those who may receive it.