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MIZORAM - BUDGET

Government of Mizoram
Budget Speech: 1995-96
By Pu Lalhmingthanga
Finance Minister

Mr. Speaker Sir,

With your permission, may I now rise to present the Mizoram Budget for 1995-1996 to this august House?

2. Before presenting the Budget as such, I may dwell a little on the general economic scene. As you know, Sir, a strong wind of drastic reforms on the economic front is sweeping the country since 1991 in the form of liberalization, de-regulation and globalisation. Unfortunately, these reforms have not proceeded at eh desired pace manifesting, of late, in some unpleasant symptoms like re-emergence of double-digit inflation causing hardship to the masses at large. Need has, therefore, been felt for giving human fact to the reforms process. However, there is nothing to cause concern. The path of progress is never straight situation only demands from us to look back and proceed with renewed vigour in the long-term interest of the country.

3. The reforms process can never be a success without the active co-operation of the States. It has cast on the States very heavy responsibility. According to Prof. Raja J. Chelliah, an eminent economist and presently Fiscal Adviser to the Union Finance Minister, some of the steps to be taken by the State Governments to facilitate and promote the reforms process are:

(a) Widening of the tax base and reform of the tax system, in particular, indirect taxes in a manner that avoids taxation of inputs or escalation of costs, and barriers to trade between States. This requires adoption of the value-added tax (VAT), greater uniformity in sales tax rates, abolition of what is called "rate war" and general agreement amongst States on the concessions to attract investment in backward areas.

(b) Restoration of the budget balance by phasing out the deficit during the next five years or so. This would require bold steps to stop the growth of the non-development expenditure. Simultaneously, the Government should get out of many areas and open them up to the private sector. Closing down of the loss-making public sector undertakings and those which have no promotional aim is an important imperative.

(c) Infra-structure development and improvement, especially in power and roads.

(d) Streaming of procedures so that industry can obtain speedy clearances and approval.

(e) Reforms and strengthening of local administration, particularly of growing towns, including reform of local taxation and larger devolution ofpower and funds to it.

This transformation can be brought about through the doctrine of "State sponsored collective self-reform".

4. We regard the above measures as unexceptionable and resolve to so refashion our economic and fiscal policies as to subserve this transformation process to the maximum.

5. Mizoram is a poor State with the majority of the population living below the poverty line. There is required a massive effort at development for a turn-around in a given time-frame. This task cannot be accomplished without creating in the State a congenial atmosphere for investment and production. Public investment alone would not do. While all this requires education and a change in the attitude of the people in general, a change in the approach and attitude of political leadership is also necessary.

PLAT EFFORT:

6. As against the Eight Plan (1992-97) target of Rs. 763 crore, the plan outlay in the first two years (1992-94) amounted to Rs. 342 crore. For the third year (1994-95), the size of the State Plan was fixed by the Planning Commission at Rs. 207.66 crore. However, we could not avail of the assistance of Rs. 10 crore for the externally-aid projects and of Rs. 5.25 crore from the Infra-structure Leasing and Financial Services Ltd. on the other hand, the Commission made a Special allocation of Rs. 10 crore in the current year for initiating the work on the construction of the Lengpui airfield. With this, the outlay on the State Plan in the current year is anticipated at Rs. 202.41 crore.

7. Sir, I would be failing in my duty if I do not congratulate, on behalf of this august House, our Hon’ble Chief Minister for the success of his untiring efforts to make Government of India agree to meet our long-felt need of constructing an airfield at Lengpui. I must thank the Government of India also for this. When operational, this would go a long way in opening up the State to a wider world and promoting investment.

8. For the next year (1995-1996), the Planning Commission approved an outlay of Rs. 227 crore, representing a step-up of over 12 percent over the anticipated outlay in the current year. In framing plan proposals, we have followed the strategy suggested by Planning Commission and identified the following major trust areas:

(a) Agriculture with emphasis on elimination of ‘Jhuming’ self sufficiency in foodgrain and promotion of horticulture;

(b) New Land Use Policy (NLUP) aiming at complete eradication of shifting cultivation through provision of alternative permanent settlement of ‘Jhumis’ families;

(c) Generation of power for meeting the huge gap between production and demand through internal generation;

(d) Achievement of full literacy;

(e) Provision of drinking water and communications in rural areas; and

(f) Employment generation through agro-forest based industries.

9. The board sectoral allocation of the outlay of Rs. 227 crore on the State Plan in 1995-1996 is as under:

(Rs. In crore)

        1. Agriculture and allied activities                                                 21.90
        2. Rural Development                                                                    37.35
        3. Irrigation and Flood Control                                                        7.52
        4. Energy                                                                                           30.00
        5. Industry & Minerals                                                                       9.90
        6. Transport and Communications                                              33.47
        7. District Councils                                                                          11.46
        8. Education and allied activities                                                  13.25
        9. Medical & Public Health                                                               7.87
        10. Water Supply & Sanitation                                                       12.70
        11. Urban Development (incl. Capital project)                           14.15
        12. Civil Aviation                                                                               10.00
        13. Other minor sectors                                                                  17.12
                        TOTAL:                                                                               227.00

10. Let me express my sincerest gratitude to the Planning Commission for its magnanimity in providing Central assistance (Rs. 242.03 crore) in excess of the next year’s Plan. This marks in a way reversion to the pre-1987 practice, as demanded by the State Government, to take the non-Plan account also into consideration while determining the level of Plan assistance.

11. The assistance provided by the Planning Commission for the next year’s plan budget includes Rs. 15 crore earmarked for the externally-aided projects and Rs. 10 crore each for the Capital project, Serlui ‘B’ Hydel Project and Lengpui airfield. We have identified the schemes/projects and hope to utilize the Externally Aided Project (EAP) assistance this time fully.

12. The Agriculture and Allied Sectors including Rural Development with over 26 percent of the total outlay continue to enjoy the top-most priority. The transport and Communications Sector is proposed to be given a big boost with allocation representing a step-up of over 34 percent over the current year. The Power Sector also continued to occupy an important place with an outlay of Rs. 30 crore next year. It is also heartening to note that the three District Councils have an allocation of Rs. 11.76 crore, apart from Rs. 1.23 crore allocated to the Singlung Hills Development Council being constituted. In the Social Services Sector, education and water supply have prime place with outlays of Rs. 136.25 crore and Rs. 12.70 crore respectively. The latter sector may have an additionality of Rs. 10 crore out of the assistance earmarked for externally-aided projects.

13. A booklet on ‘Highlights’ of the performance in 1994-1995 and Programmes of various departments in 1995-1996 has been circulated separately to the honourable members along with the Budget documents. If you permit, Sir, I may briefly cover come of the important developments.

14. The rural development including agriculture and allied activities, power and roads & bridges are the three most important areas of the State’s development programmes. Special mention may be made of the sizable provisions of Rs. 24.97 crore in 1994-1995 and of Rs. 25 crore in 1995-1996 set apart for the New Land Use Policy (NLUP) designed to wean away people from ‘Jhuming’. The power sector on which an amount of Rs. 27.47 crore was spent in 1994-1995 has been given an allocation of Rs. 30 crore for 1995-1996. The construction of Maicham Mini Hydel Project has been completed and the preliminary work on Teirei and Tuipanglui Hydel Projects has been taken up. Besiders, Ku-Tlabung Mini Hydel Project (4.5 MW), Maicham Statee II (2MW), Ngengrual (2MW) and Tuiphal Projects are proposed to be taken up next year. As regards transmission, the Lunglei Sub-Station (132 KV) was commissioned in November last and the work on five more 132 KV lines is in progress. As many as 592 villages are expected to be electrified by the end of this year.

15. The roads and bridges sector on which an amount of Rs. 23.19 crore was spent this year has been allotted Rs. 22 crore next year. In 1994-1995, 84.64 KM of formation cutting, 41.77 KM of soling and 52.76 KM of black topping was completed. The programme for 1995-1996 includes 111.04 KM of formation cutting, 81.50 KM. of soling and 149.30 KM of black topping. While on this sector, I may make mention of the emphasis being laid by the Government on developing alternative road link of the State with the outside world. Speedy develo0pment of the 140 KM long Seling-Tipaimukh road connecting the State with Manipur assumes and added importance looking to the problems the State had in the recent past. As regards road transport, 6 new Buses were purchased next year.

16. One notable scheme to which I would like to make special mention of is regarding the Lengpui airfield. An allocation of Rs. 10 crore each has been made for this project in 1994-1995 and 1995-1996. The work on this project is expected to be taken up soon.

17. A State Soon Farm was established at Chemphai in 1994-1995 and a Veterinary College under the Central Agriculture University is proposed to be set up during 1995-1996. The Forest Department took up afforestation of 14,070 hectares of land in 1994-1995d and proposes to cover 9,600 hectares of more land next year.

18. With a view to providing the requisite infrastructure to industries, special attention is being paid for the development of industrial estates and industrial growth centres. The Zuangtui Industrial Estate is already functional and the Vertical Industrial Estate is in the final stage of completion. The Industrial Growth Centre at Luangmual involving cost of rs. 25 crore is expected to get approval of Government of India soon. The scheme for payment of central transport subsidy to encourage small scale industries continues to make progress. While on this sector, I would like to make a special mention of the tea industry. This industry has the potential of turning the fact of the economy of the State in a big way. I am happy to say that good progress has been made in this area. A nursery with about 13 lakh tea-seedlings has been raised at Luangmual. Two more nurseries are being start next year. The Construction work on the tea processing unit is also expected to start in 1995-1996.

19. The social services sector continued to be assigned an important place in our development programmes. In 1994-1995, three new Sub-Divisional Education Offices were opened at Aizawl, Serchhip and Lunglei West. 10 unaided Middle Schools and 5 unaided High Schools are proposed to be upgraded to deficit status next year. The Art and Culture Department which organized several cultural shows within and outside the State, proposes to take up a multi-purpose cultural complex for the preservation of the cultural heritage of Mizo. It also extended grants-in-aid for a research project on the Mizo Hisotory. As regards sports, the State participated in the 27th Junior National Boxing Championship held at Guwahati in November, 1994 in which a boxer from Mizoram, winner of Gold Medal, was declared as the best boxer. Further, a Mizo archer represented India in the 12th Asian Games held at Hirosima in Japan and the Mizoram football team won the King’s Cup at Thimpu, Bhutan, in September, 1994. I extend my heartiest congratulations on behalf of this august House, to all the sportsmen and women who brought glory to the country at large and Mizoram inparticular.

20. The Health Department gave priority health care in rural areas. In 1994-1995, construction of one Community Health Centre at Ngopa and two Primary Health Centres at Sairang and Khawhai was completed. Four more PHC buildings are nearing completion. Next year, apart from completing buildings for Community Health Centre (CHC) at Vairengte and Saitual and 6 more Primary Health Centre (PHC) buildings, a 30 bedded CHC will be established at Sakawrdai. Coming to hospitals, the administrative wing of the Aizawl Civil Hospital will be fully operational next year. The establishmewnt of a mental Hospital is also proposed to be taken up. As regards family welfare, the State, I am proud to say, exceeded the target fixed by the Government of India for sterilization, IUD insertion, etc.

21. The Lunglei Water Supply Scheme partially operated in 1994-1995 is expected to be fully commissioned shortly. The Greater Serchhip Water Supply Scheme made good progress and the work has been started on the Kolasib Scheme. Phase –II of the Greater Aizawl Water Supply Scheme is proposed to be started next year. It is also proposed to launch, with external aid, an integrated project for Aizawl covering sewerage, solid waste management, water quality monitoring and public health education. As regards augmentation of rural water supply, 36 habitations were already covered in the current year and 40 more are proposed to be covered next year.

22. As regards the Revenue Department, the cadastral survey which is in progress in the state completed the work in four rural towns in 1994-1995 and is expected to cover three more next year. In respect of House Site Plan also, four rural towns were covered in the current year and three more would be taken up in 1995-1996. The Accounts and Treasuries Department completed the GPF account of Government servants for the year 1993-1994.

23. Under the scheme "Integrated Development of Small and Medium Towns", the Government of India approved the projects of Serchhip and Kolasib towns. The Local Administration Department successfully conducted general elections of 358 village councils in Aizawl District and 121 village councils in Lunglei District. Another achievement of this Department to which I would like to make mention of is the loan of Rs. 5 crore being obtained from Housing & Urban Development Corporation (HUDCO) for disbursal as house-building advances to Government employees.

24. Sir, as you know, the three Autonomous District Councils have been assigned more powers and funds for carrying out the larger role entrusted to them. An allocation of Rs. 11.76 crore has been made to them under the annual plan for 1995-1996, apart from the non-Plan Budget of Rs. 9.60 crore. A token provision has been made next year for re-organisation of districts also.

25. It is a matter of pride that the insurgency in the northern part of the State has ended. Apart from other measures for normalization, the Sinlung Hills Development Council is being constituted and a plan allocation of Rs. 1.23 crore made to it for 1995-1996.

26. The Excise Department, in collaboration with the Police Department continued their vigorous efforts at combating illicit drug-trafficking and abuse. During the current year, 111 drug-traffickers were arrested and 50,069 capsules of Proxyvon, 4876 bottles of Phensydyl, 46 Kgs of Ganja, 251 Grams of heroin and a huge quantity of illicit liquor were sized. Certain sections of the Drugs and Cosmetics Act, 1940 are being amended to make it more effective.

27. Lastly, a word about the Finance Department. The Department has done exceedingly well on lotteries and small savings. The receipts from state lotteries in the current year are expected to be more than double of the Budget estimate. In regard to small saving collections also, the target of Rs. 4.65 crore has been exceeded.

REVISED ESTIMATES FOR 1994-1995

28. According to the Reserve Bank account, the year 1994-1995 opened with a deficit of rs. 31.92 crore. This was only slightly higher than the deficit of Rs. 31.57 crore envisaged in the Budget Estimates. However, as per Revised Estimates, during the year transactions revealed an over-all deficit of Rs. 9.70 crore against the budgeted deficit of Rs. 4.24 crore. This deterioration could be attributed entirely to the additional expenditure of about Rs. 15 croree on two installments of Dearness Allowances (DA) effective from 1.1.1994 for which no provision had been made in the budget estimates. But for the sacrifice made by our employees through impounding the bulk of the additional D.A., our position would have worsened further. I must thank the employees for this.

29. As per the Revised Estimates, the current year is likely to close with a deficit of Rs. 41.62 crore. Though big, it is only two – third of the deficit estimated by the Planning Commission. Sir, with your permission, I must say with all humility that this difficult task was accomplished by the Finance Department by being somewhat unpleasant to most departments. We realized that only self discipline would save us from the fiscal disaster we were heading to. The task is, however, in no way complete and will have to bee carried forward to reverse the trend of budgetary imbalance.

BUDGET ESTIMATE FOR 1995-1996

30. In view of what I have said, my first and foremost concern in framing the Budget for the year was to take steps to reduce the opening deficit of Rs. 41.62 crore to the utmost extent possible. With all the modesty at my concerned, I claim to have succeeded quite a bit in this task. I am most happy to present a surplus Budget. My Budget shows an overall surplus of Rs. 8.72 crore against a deficit of rs. 9.70 crore as per the Revised Estimates for the current year, showing the improvement of Rs. 18.42 crore. It is especially creditable in view of the fact that the total central support assumed for next year is rs. 13.88 crore less than that in the current year. Such an improvement was possible as a result of drastic cuts in non-Plan expenditures. This was no easy a job and could be accomplished only with the full co-operation of all the departments. I appeal to them through this august House to help me to maintain the trend during the year.

31. The Budget Estimates place the revenue receipts at Rs. 515.96 crore and revenue expenditures at Rs. 430.05 crore, showing a surplus of Rs. 85.91 crore on Revenue Account. However, with a huge deficit of Rs. 81.81 crore on Capital Account, the Consolidated Fund revealed a small surplus of Rs. 4.10 crore only. This was augmented by Rs. 4.62 crore on account of Public Account trasactions. In over-all, the Budget places the surplus at Rs. 8.72 crore, reducing the opening deficit to rs. 32.90 crore.

32. I am deliberately not making extra provision in the Budget for the two installments of D.A. which may fall due next year, in the hope that this burden would be accommodated by most of the departments through economy in their normal Budget allocations or through a scheme of impounding to the extent necessary.

33. Sir, as you know, our Budget is heavily dependent on Central dispensation. In so far as non- plan account is concerned, this dispensation from the next year (1995-1996) is to be in terms of the award of the Tenth Finance Commission. However, as the recommendations of this Commission were not known while preparing the Budget, the Budget had to be prepared on the basis of the award of the Ninth Finance Commission. With the improvements as per the award of the Tenth Finance Commission, the bulk of the remaining deficit, if not all, is expected to be covered, putting the State’s finances more or less on an even keel. Once this his achieved, our scared job should be to make all efforts to maintain this position through learning to live within our means.

34. For funding of the State Plan in 1995-1996, the State Government has undertaken to mobilize additional resources of Rs. 20.61 crore through various measures including impounding of D.A. For the present, I am not proposing any measure for this purpose. After the report of the Mizoram Resource Mobilisation and Taxation Enquiry Committee which is in session, becomes available. The Government may come up with proposals during the course of the year, for raising additional resources.

35. Last, but not the least, I would like to express may sincere thanks to the officers and staff of all Departments, especially the Finance Department and the Government Press, with whose unstinted co-operation alone I have been able to present my Budget to this august House in time.

36. Mr. Speaker, Sir, I think you an all the members of the House for giving me patient hearing and attention, I earnestly appeal to them to give me benefit of their thought on my proposals.

37. With these words, Sir, I commend the State Budget for 1995-1996 for consideration and approval of this august House.

Thank you, Sir.

 

 

 

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