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Statements on Compliance of Frbma to Be Attached to Budget Documents 2007-08

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Statements on Compliance of Frbma to Be Attached to Budget Documents 2007-08 GOVERNMENT OF NAGALAND Statements under The Nagaland Fiscal Responsibility and Budget Management Act, 2005 ( Laid in the Nagaland Legislative Assembly along with the Budget 2020-21 ) Finance Department Government of Nagaland 1 Form F – 1 (See rules 3 and 4) MACRO ECONOMIC FRAMEWORK STATEMENT 1. Overview of the State Economy : 1.1 The size, composition and growth of the economy determine the revenue potential of the State and the size of the budget; and the size of the budget determines the level of public expenditure. The economy is measured in terms of Gross State Domestic Product (GSDP) at current prices. The projected GSDP and per capita income for the years 2015-16, 2016-17, 2017-18 and 2018-19 are as in Table 1.1 below: Table 1.1 (Rs. in Crore) 2015-16 2016-17 2017-18 2018-19 2019-20 (actual) (actual) (quick) (Advance (Advance) GSDP at current 19524 21488 23623 25986 27140 (R. cr.) Per capita income (current prices) (R.) 86890 93210 99870 107060 109430 2. Overview of State Government Finances: 2.1 The fiscal base and fiscal health of a State are directly related to the development of the State. Public Investment in the infrastructure would expand the productive capacity of the economy and thus expand the revenue generating potential of the State. The fiscal base is determined by the size of the economy, which can be expanded in the long run. Thus, in the medium term, the fiscal health of the State has to be improved so that the Government can increase the development expenditure to expand the economic base. 2.2 The total receipts of the Government comprise the Consolidated Fund of the State and the balance from Public Account. The proportion of the revenue receipts in the Consolidated Fund of Nagaland during the years 2012-12 to 2017-18 has been varying between 86.93% and 95.19% (Table 1.2 below). Table 1.2 Total Receipts of the State Government (Rs. in Crore) Recov Net Revenue -ery Consolid- Total RR as RR as Public Public Year Receipts of ated Fund (5+6) % of % of Debt Account (RR) Loans (CF) CF Total (2+3+4) 1 2 3 4 5 6 7 8 9 2012-13 6204.29 764.72 0.84 6969.85 167.64 7137.49 89.02 86.93 2013-14 6497.90 619.16 0.92 7117.98 330.74 7448.72 91.29 87.24 2014-15 7650.94 725.00 0.71 8375.94 -337.96 8037.98 91.35 95.19 2015-16 8043.57 977.40 0.50 9021.47 163.38 9184.85 89.16 87.57 2016-17 9442.28 1182.71 1.09 10626.08 -23.87 10602.21 88.85 89.07 2017-18 11019.21 1235.02 1.09 12255.32 -130.83 12124.49 89.91 90.88 2018-19 11437.41 947.84 1.08 12386.33 595.86 12982.19 92.33 88.10 FRBMA 2020-21 2 2.3 Revenue Receipts comprises of State’s own revenue receipts and Central transfers. The Central tax devolution is determined by the Finance Commission Award. The Fourteenth Finance Commission (FFC) awarded 0.498% of sharable tax excluding service tax and 0.503% of the sharable service tax to Nagaland. During the years 2010-11 to 2016-17, proportion of State’s Own Revenue Receipts (SORR) in Total Revenue Receipts varied between 8.21% to 9.92% (Table 1.3). Thus the fiscal stability of the State is predominantly dependent on the Central transfer. Table 1.3 Composition of Revenue Receipts (Rs. in Crore) State’s Own Revenue Total Proportion Central Devolution Receipts (SORR) Revenue of SORR in Year Tax Non- Total Tax Grants Total Receipts Total Tax Revenue 2010-11 227.32 183.14 410.46 689.46 3900.07 4589.53 4999.99 8.21 2011-12 303.88 232.95 536.83 803.20 4246.35 5049.55 5586.38 9.61 2012-13 339.95 207.17 547.12 917.14 4740.03 5657.17 6204.29 8.82 2013-14 333.39 216.57 549.96 1001.27 4946.67 5947.94 6497.90 8.46 2014-15 388.61 270.61 659.22 1062.68 5929.04 6991.72 7650.94 8.62 2015-16 427.10 256.39 683.49 2540.72 4819.36 7360.08 8043.57 8.50 2016-17 510.76 345.52 856.28 3032.62 5553.38 8586.00 9442.28 9.07 2017-18 638.28 388.53 1026.81 3353.33 6639.27 9992.40 11019.21 9.92 2018-19 846.43 255.24 1101.67 3792.41 6543.33 10335.74 11437.41 9.63 2.4 The growth in State’s own Tax Revenue is indicated in Table 1.4 and the trend of realization of Non-Tax Revenue is indicated in Table 1.5. Table 1.4 Growth of State’s Own Tax Revenue (Rs. in Crore) Own Tax Average 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 annual Revenue growth Professional Tax 27.22 28.30 27.96 29.64 30.28 34.88 35.33 4.02% Land Revenue 0.72 0.70 0.75 0.75 0.82 0.90 1.13 7.84% Stamps and 2.53 5.29% Registration fees 1.58 1.77 1.93 2.04 2.05 2.62 State Excise 3.73 4.86 4.70 5.12 4.63 4.20 4.65 5.54% Taxes on Sales, Trades including 257.21 250.21 294.29 328.58 400.12 474.67 656.33 16.64% SGST etc. Taxes on Vehicles 41.59 36.15 46.46 53.09 57.39 101.53 126.22 22.76% Taxes on Goods and Passengers 6.71 10.79 7.70 5.88 14.76 17.59 20.17 33.11% Other taxes 1.19 0.61 4.82 2.00 0.71 1.89 0.07 110.24% Total Own Tax 339.95 333.39 388.61 427.10 510.76 638.28 846.43 16.22% Revenue FRBMA 2020-21 3 Table 1.5 Trend of Realisation of State’s Own Non-Tax Revenue (Rs. in Crore) Own Non-Tax Revenue 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 Interest Receipts 5.90 7.62 7.23 5.19 6.73 6.97 12.06 Other Administrative Services 3.22 2.73 4.03 2.54 2.48 6.37 6.52 Misc. General Services 6.60 6.57 13.08 13.43 13.64 16.16 24.15 (including Lottery) Water Supply 1.74 1.95 1.95 2.43 2.65 3.21 2.88 Housing 5.12 5.13 5.01 5.36 5.19 6.28 6.77 Forestry & Wild Life 7.76 8.81 9.68 8.80 10.03 9.73 12.62 Power 102.83 88.31 98.91 111.10 114.58 127.89 147.97 Road Transport (NST) 11.37 12.17 12.97 10.81 9.00 7.35 8.74 Others 62.63 83.28 117.75 96.73 181.22 204.57 30.53 Total Own Non-Tax Revenue 207.17 216.57 270.61 256.39 345.52 388.53 252.24 Expenditure 2.5 Public expenditure is an instrument through which the Government provides social and physical infrastructure for the development of the State. Thus the size, composition and productivity of public expenditure are important parameters to assess the effectiveness of public expenditure in accelerating growth impulses of the economy. The basic categorization of public expenditure is plan and non-plan. 2.6 Development expenditure has grown at average annual rate of 13.08% whereas Non Plan (Non-Development) expenditure has grown at average annual rate of 13.94% as shown in Table 1.6. Table 1.6 Development and Non- Development Expenditure (Rs. in Crore) Development Growth Non- Growth Total Growth Year including (SR/ NEC (%) Development (%) Expenditure (%) NLCPR &CSS) 2010-11 2010.41 28.45 3304.49 23.45 5314.90 25.29 2011-12 2070.92 3.01 4054.11 22.68 6125.03 15.24 2012-13 2279.23 10.06 4577.34 11.76 6856.57 11.94 2013-14 2034.98 -10.72 4923.43 7.56 6958.41 1.49 2014-15 2252.26 10.68 5533.33 12.38 7785.59 11.88 2015-16 2181.90 -3.13 6459.26 16.73 8641.16 10.99 2016-17 2807.73 28.68 6920.31 7.13 9728.04 12.58 2017-18 3863.97 37.62 7602.23 9.85 11466.20 17.87 2018-19 3854.08 - 0.26 8661.46 13.93 12515.54 9.15 FRBMA 2020-21 4 2.7 More appropriate classification of the public expenditure is capital and revenue expenditure. The level of Capital Expenditure indicates the level of public investment, which not only creates public assets but also accelerate private investment. It is important to reduce the Revenue Expenditure and increase Capital Expenditure. The Revenue and Capital Expenditure during the last few years are indicated in Table 1.7. Table 1.7 Revenue and Capital Expenditure (R in Crore) Revenue Capital Year Growth (%) Growth (%) Expenditure Expenditure 2010-11 4187.84 28.76 1122.94 11.35 2011-12 4875.66 16.42 1249.39 11.26 2012-13 5601.39 14.88 1255.18 0.05 2013-14 5750.35 2.65 1207.06 - 3.83 2014-15 6762.41 17.60 1023.17 -15.23 2015-16 7581.92 12.11 1059.23 3.52 2016-17 8641.94 13.98 1076.10 1.59 2017-18 10191.35 17.92 1274.85 18.47 2018-19 10919.98 7.15 1595.56 25.16 2.8 Major components of Revenue Expenditure are Salaries, Pension, and Interest Payment as is shown in Table 1.8.
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