BHUBANESWAR: Even as the industry and trade bodies have welcomed the first Budget of the Narendra Modi Government, it has come in for criticism from the State Government for not addressing the concern over the rollout of Goods and Service Tax (GST) and compensation to the States for reduction in Central Sales Tax (CST) rate.
Besides, the State’s share in Central taxes has come down in the Budget compared to the interim budget of the UPA government. While the State’s share was projected at Rs18,581 crore in the vote-on-account, it has come down to Rs18,317 crore in 2014-15, Finance Minister Pradip Kumar Amat said and added that the loss on this account will be `264 crore.
The State had claimed Rs1,885.08 crore for compensation towards reduction of CST from 2007-08 to 2010-11, but received only Rs1,303.08 crore. The compensation claimed by the State for 2011-12 and 2012-13 was Rs 869.58 crore and Rs 1087.67 crore respectively. But there is no commitment in the Budget for compensation to the States towards loss on account of reduction in the rate of CST, Amat said.
Marginal increase in the outlay of the flagship schemes will affect the release of backlog Central assistance for the State plan schemes like the Accelerated Irrigation Benefit Programme (AIBP). A number of new programmes without adequate financial outlays do not inspire confidence, Amat said and added that steps for taxation and expenditure reforms have only been hinted at without specifying the details. Nothing has been announced to increase the growth of Central tax revenue which would have helped in fiscal consolidation at the Centre and the States, he said.
The Budget speaks of tackling inflation and going back to the high growth path of 7 to 8 per cent in three to four years without announcement of any substantive measures to accelerate the growth process, he said.
Chief Minister Naveen Patnaik also said under the prevailing circumstances with high inflation coupled with drought-like scenario, greater focus should have been laid on agriculture, irrigation and social sector. However, the Union Budget lacks focus in all these crucial areas, he said.
Except for the promise for an IIM, there is nothing for Odisha in this Budget, Naveen said and added that as usual, the textile mega-cluster has by-passed Odisha. The Chief Minister said nominal increase in the allocation of flagship schemes will hurt the development process of the States. Meagre allocation on ambitious programmes like rural electrification speaks of tokenism, he said.