State’s salary bill higher than revenue

R DUTTA CHOUDHURY
 GUWAHATI, March 7 – After the implementation of the 7th Pay Commission recommendations, the expenditure incurred by the Assam Government is much higher than its own revenue generation. Though the State’s share of Central taxes has increased considerably over the years, the high salary burden has affected development works.Highly placed official sources told The Assam Tribune that under the present circumstances, the State Government would have to find out ways to increase its own revenue generation by plugging the loopholes in tax collection. After the introduction of Goods and Services Tax (GST), the State can impose tax on its own on only a few items including petroleum products and alcohol. For increasing GST on any item, the State Government would have to approach the GST Council with detailed proposals. Moreover, after the implementation of the GST regime, the State’s revenue collection growth is still not up to the desired level and it is around six per cent. However, the Centre has been paying the shortfall as was assured.

Sources revealed that in the current financial year, after the implementation of the recommendations of the 7th Pay Commission and payment of arrears due to the employees in two instalments, the State Government had to take an additional burden of nearly Rs 5,000 crore. It is estimated that the total cost for payment of salaries, wages and pensions in the current financial year would be around Rs 28,000 crore against the estimated revenue generation of Rs 15,000 crore. This will leave a huge financial deficit and that would have to be met from the funds received from the Central Government on account of the State’ share in Central taxes. In an ideal situation, a State Government should be able to increase its revenue generation to meet at least the requirement of salaries and wages so that the other funds including the State’s share of Central taxes can be utilized for development works. But this has not been the case in Assam over the years and the gap between the revenue generation and salaries to be paid to the employees only widened after the implementation of the last pay commission recommendations.

Official sources said that the State’s share in Central taxes is increasing considerably over the years and during the period from April to January in the current financial year, the State received an amount of Rs 15976.09 crore under the head compared to Rs 9955.03 during the same period in the financial year 2014-15. The State Government is authorized to utilize the amount wherever required and a large portion of the amount goes in meeting the obligation of payment of salaries and pension and only a small amount is left for development works. The non plan financial grants to the State are also decreasing as it is given only on the basis of the recommendations of the Finance Commission.

Though the funds received by the State under the Centrally sponsored schemes increased considerably this year. That money is given only for specific schemes and the State Government is not authorized to utilize the funds elsewhere. In the current financial year, during the period from April to January, Assam received Rs 9592.22 crore for implementation of Centrally sponsored schemes, which is much higher compared to Rs 6471.85 crore during the same period in the last financial year.





Source : http://assamtribune.com