GUWAHATI, Jan 12— The Committee On Fiscal Reforms (COFR), constituted by the State Government with State’s former Chief Secretary Haren Das as chairman, has identified increase of expenditure on salaries, wages and pension, rise in security-related expenditure and grants to autonomous bodies and NGOs, loss incurred by public sector undertakings (PSUs), growing public debt and contingent liabilities, huge borrowings for flood control measures, failure to increase revenue to commensurate with expenditure and leakages in checkgates, tax offices and business establishments in matters of tax realisation as the major factors eating into the vitals of the State’s economy.
Presenting the report of the COFR before the senior officers of the State at a function chaired by Chief Minister Tarun Gogoi at the Administrative Staff College, Khanapara here, COFR chairman Haren Das said that in the case of salaries, the increases have been very high, mainly due to additions in the number of employees and the effects of the Pay Commission recommendations, including several doses of dearness allowance payments. According to the budget estimate of 2001-2002, a total of Rs. 4,990.55 crore is required to meet the annual payments to employees and pensioners against a grand total of the State Government’s expenditure on all items of Rs 9,667.63 during the year. This is 51 per cent of the total expenditure, said Sri Das. Besides, the State Government had to make an amount of Rs 700 crore between January 1, 1996 and July 31, 1998 against arrear payments to the employees and between January 1, 1996 and June 30, 2001 it had to release 43 doses of Dearness Allowance (DA) at the rate of Rs 2.68 crore per month. During the fiscal year of 2000-2001 it had to pay Rs 673.18 crore as pension to its former employees.
In two large departments – Education and Home and Political (mainly police) also the rate of increase in expenditure has been very high, he said. Elaborating, he said that in Education Department, against an expenditure of Rs 259.97 crore in 1986-87, the figure rose to Rs 2,466.56 crore in 2001-2002 (according to budget estimates) Most of the expenditure is on salary. On the otherhand, in the Home and Political Department, the expenditure rose from Rs 99 crore in 1986-87 to Rs 724.99 crore in 2001-2002, Sri Das said, adding, against the amount spent on security related during 1990-91 to 2001-2002, the Central Government made a reimbursement of only Rs 310.77 crore. Another amount of Rs 40 crore in this connection is reported to have been sanctioned recently, he said. Against a total capitalisation of Rs 4,500 crore in 49 PSUs these public sector units have accumulated a total loss of Rs 4060 crore, while against a public debt amount of Rs 733.34 crore of the State Government in 1980-81, it had a total debt stock of Rs 10,013.12 crore in 2000-2001, Sri Das said, adding, the cost of debt servicing on the loans along with the salary and pension expenditure, constitutes the bulk of revenue expenditure as well as capital expenditure. The expenditure on these three items is over 60 per cent of revenue and overall expenditure.
Moreover, the State Government has also an outstanding principal amount of Rs 1525.32 crore, as on March 31,2001 as guarantee provided to the loans taken by the PSUs, Sri Das said. The huge amounts borrowed from the Central Government for structural measures of flood control, some of which disappear every year, have hardly brought any relief or resulted in any economic benefits. And these funds were of the nature of 100 per cent loans on which interest also had to be paid, he said. But failure of the State Government to increase revenue commensurate with expenditure due to constitutional limitations, tax havens and lack of economic growth and devolutions under the Finance Commissions and leakages in check gates, tax offices and business establishments, have rendered it unable to fund the plan projects fully and to pay its employees in time. Besides, the Government has also become prone to the practice of diversion of funds from Plan heads to non-Plan heads while there is a perceptible decline in capital expenditure and increase in revenue expenditure.
The COFR tried to study all these aspects in its 30 sittings to find out the structural imbalances that have been afflicting the State’s finances and has made 208 recommendations in its 193 page report, concerning policy measures for achieving fiscal balance and stabilization through appropriate policy initiatives, Sri Das said. COFR members Shafiqul Hussain Choudhury, Dr Trishna Mahanta, Prof Bhuban Barua, Prof Dr Atul Sarma and its special invitee S K Bhartia also addressed the function. Later, addressing a joint press conference at the same venue along with the COFR members, Chief Minister Tarun Gogoi said that his Government was for a public debate on the recommendations made by the COFR and all political parties and organisations would be invited to take part in the discussion on the COFR report. Sri Haren Das expressed the hope that if all the recommendations of the COFR were accepted/implemented the State Government would be able to garner Rs 1,100 crore every year. Explaining, Dr Atul Sarma said that the recommendations were aimed at maximising the Government’s revenue and enhancing expenditure effectiveness by eliminating wasteful expenditure so that in the coming years a conducive atmosphere for growth and enhancing the efficiency of the system could be created.