• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Our Bureau

`Our revenue deficit as a percentage of the gross fiscal deficit is among the highest among the States. But we have turned the corner. The worst is definitely behind us.'

THIRUVANANTHAPURAM, March 14

AN Agricultural Price Stabilisation Fund, with a provision of Rs 50 crore, is one of the major highlights of the State Budget.

This fund is expected to provide income stability for farmers engaged in the cultivation of coconut, tea, coffee, arecanut, rubber, pepper, ginger, cardamom and other spices. It will be set up as a revolving fund, to be recouped every year. The criteria and rules for availing support of this fund would be worked out and linked to an index of agricultural prices and cultivation costs.

Similarly, a Traditional Industries Support Fund, envisaging a start-up allocation of Rs 50 crore, has been announced for the benefit of the traditional sector, which has been at the receiving end of the WTO-administered trading mechanics. The Fund would be used to finance a comprehensive revitalisation plan for traditional industries which is estimated to cost Rs 500 crore over a period of the next three years. The resources required for the plan would be raised from both the national and international agencies.

The plan will be developed jointly through the departments of Industries, Agriculture, Fisheries, Coir, Animal Husbandry and Science and Technology and implemented in partnership with the local governments and neighbourhood groups. The fund will be set up before July this year so that implementation can begin in September.

Explaining the new set of initiatives on the fiscal front, the Finance Minister said the State Government was in the process of piloting a State Fiscal Responsibility Bill, which would bind it to a new code that emphasises prudential financial management. "We would not transfer money to the Public Account to whitewash our accounts and record notional expenditure. The expenditure that we report to this House would be the real expenditure," Mr Sankaranarayanan said, explaining the salient features of the new fiscal regime. A bill to cap guarantees was already being considered by the House.

The State Government was also participating in the debt swap scheme announced by the Centre, and has already retired debts to the tune of Rs 258 crore.

The Finance Minister announced the creation of a Sinking Fund for redeeming outstanding open market borrowings. The Government shall contribute an amount of 1.5 per cent of outstanding open market borrowings to the fund annually. The fund shall be made operational in the next three months.

"Our revenue deficit as a percentage of the gross fiscal deficit is among the highest among the States. But we have turned the corner. The worst is definitely behind us," Mr Sankaranarayanan said.

The State Government intended to avail more funds under the Rural Infrastructure Development Fund (RIDF) of Nabard taking advantage of their attractive interest.

"We intend to avail Rs 400 crore", the Finance Minister said. The State registered a growth rate in real terms of 4.82 per cent during 2002-03, exceeding the national growth.

Of the Rs 4350-crore annual plan, the Modernising Government Programme (MGP) funded by the Asian Development Bank, has been allocated Rs 513.35 crore, a significant portion of which would be spent at the level of the local governments.

This meant the State Government would surpass the traditional allocation of a third of the total Budget to the local governments. This would be true in the case of funds for SC/ST development as well.

The Finance Minister said the MGP would be discussed in public forums, seminars and workshops before the Government takes a final decision. This, along with the remaining tranches and the fiscal reform package, the power and urban sector packages from ADB of $450 million (Rs 2250 crore) would help raise the per capita availability of external funds in the State.

Additionally, the Japanese-supported project for water supply has been revived. By the next year, the Decentralisation Support Programme, another Dutch assisted programme, will enter into a major implementation phase. The next phase of the Swiss assisted programme for supporting local governments is also expected to commence in the coming year.

The State Government has also submitted two `very important' proposals in the health sector to the World Bank, one for strengthening medical colleges at an outlay of Rs 127 crore and another for Rs 814 crore for strengthening the secondary level hospitals, the Finance Minister said.

Article E-Mail :: Comment :: Syndication

Stories in this Section
Safeguard probe on Bisphenol imports

Copyright © 2003, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line