Gujarat may go for Plan cut

On the other hand, sales tax collections are expected to be down from the estimated Rs 5,750 crore to around Rs 5,400 crore, electricity duties from Rs 1,700 crore to Rs 1,450 crore, and non-tax revenues only Rs 1,100 crore against a target of Rs 1,325 crore.

In fact, Government sources say the total revenue shortfall from both tax and non-tax revenue may exceed Rs 1,000 crore. Therefore, protecting the Plan size is going to be extremely difficult. As the Gujarat8217;s current annual Plan outlay includes considerable expenditure on salaries, the implications on the development of the State are obvious. Thereis talk of raising money by increasing water cess and power rates.

But power rates can only be raised after a recommendation from the regulatory commission, which is unlikely to come soon. The Gujarat Government can raise water cess, but the income is unlikely to be anywhere near the total shortfall.

While uncertainty looms over the current Plan, Gujarat Chief Minister Keshubhai Patel is keen on having an outlay of Rs 8,000 crore for the next annual Plan, even though the Finance Department is of the opinion that any figure higher than Rs 7,200 crore is unrealistic.

Deputy Chairman of State Planning Commission Suryakant Acharya says that the Gujarat Government would get more non-tax revenue, but doesn8217;t commit how, when and how much.

There has been a consistent deterioration in the State8217;s financial health in recent years. The fiscal deficit has increased from 3.53 per cent of the State8217;s gross domestic product in 1996-97, to 4.29 per cent in 1997-98, and 5.99 per cent in 1998-99, when ideally itshould be around two per cent.