The Hindu : Front Page : Focus on raising revenue receipts

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Friday, Mar 09, 2007
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Focus on raising revenue receipts

Special Correspondent

Budget aims at strengthening revival of agriculture and industry: Isaac

T.M. Thomas Isaac to present Budget today

THIRUVANANTHAPURAM: Finance Minister T.M. Thomas Isaac has said the State Budget, to be presented in the Assembly on Friday, will focus on increasing the revenue receipts. Addressing a press conference here on Thursday, the Minister said this would be done not by increasing tax rates but by other measures. The value added tax (VAT) collection which was Rs.2,950 crore when the present Government came to power had gone up to Rs.6,000 crore this year.

Mr. Isaac said the revenue receipts needed to be increased to speed up growth in the productive sectors and improve the quality of services. "This is a major challenge in the Budget for 2007-08."

He said the Budget would address growing inequalities and take measures to strengthen the revival of the agricultural and industrial sectors.

He said the State's economy had grown at an average rate of 8 per cent during the Tenth Plan period. The annual growth rate touched 8.8 per cent now. The growth in the agricultural and industrial sectors which had been stagnant showed signs of revival in 2006-07. The prices of important commodities except coconut improved. The increase in consumption of high-tension power indicated an increase in industrial production.

The Budget was being presented against this background. It would aim at providing relief to those who suffered from the collapse in the agricultural and industrial sectors and improving the quality of welfare services.

However, the Economic Review for last year indicated that the financial position of the Government was in the way of the effective interventions by the Government. The deficits had increased. The increase in revenue expenditure which was 7.3 per cent in 2005-06 shot up to 33.28 per cent this year. This was the result of previous arrears and pay revision.

The State's tax receipts remained at 9 per cent of the domestic product, though it had risen in other States.

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