Ahead of the Lok Sabha elections, the West Bengalgovernment projected a massive

increase in the state Plan outlay in its Budget of 2013-14, even as a slew of tax reforms
failed to contain burgeoning revenue deficit.
Simplified tax payment system, curbing leakages and reforms in value added tax (VAT)
have been projected as some of the key financial reforms of the Trinamool Congress
(TMC) government with Amit Mitra as the finance minister.
As increased expenditure weighed on the impact of the tax reforms, against an
envisaged revenue deficit of Rs 3,488 crore in the Budget document of 2013-14, the
state on Monday presented a Budget with a revenue deficit of Rs 12,069 crore.
At the same time, effectiveness of tax reforms were evident from improvement in tax
collections. The state's tax revenue this year (2013-14 revised) saw a growth of nearly
19 per cent at Rs 39,100 crore, over the actual realisation of Rs 32,808 crore in 201213, and marginally below the collection target of nearly Rs 39,784 crore.
The impact of higher tax collection did help narrow the revenue deficit over the last
year, albeit marginally. Mitra could manage to reduce the revenue deficit over 2012-13
(actual), which stood at 13,815 crore (a reduction of Rs 1,746 crore).
The dismal state of finances is further corroborated by the increase in fiscal deficit at Rs
21,892 crore in 2013-14 (revised), against an actual of Rs 19,146 crore in 2012-13 (an
increase of 14 per cent). The state had projected to contain the fiscal deficit at Rs
13,414 crore in 2013-14 Budget, a grossly off-the-mark calculation.
While the Budget did not announce any specific sops for industry, a startling 63 per cent
increase in the Plan outlay for 2014-15 at Rs 43,563 crore over last year's outlay of Rs
26,674 crore, focuses on select departments.
Departments, which got high allocations, include panchayats and rural development
(increase of 149 per cent over last Budget) and Minority Affairs and Madrasa Education
(102 per cent over last Budget). On the other hand, the commerce and industry
department hardly saw any increase in allocation, from Rs 540 crore in the last budget
to Rs 594 crore in this Budget.
Interestingly, the allocation for the commerce and industry department is nearly onefourth of that to the panchayats and rural development and Minority Affairs and
Madrasa Education departments.
In 2013-14 too, these departments got some of the highest allocations with expenditure
overshooting the Budget. Introduction of welfare schemes like Kanyasharee, and fair
price medical shops and construction of rural roads of about 16,000 km have been
sighted as some of the achievements of the government. In 2014-15, the state
government will also introduce Micro Business Credit Cards on the lines of Kisan Credit
Card in association with State Bank of India, to boost small businesses.

This year, the state government has raised the tax exemption limit of professional tax to
Rs 8,500 per month, while the exemption limit for professionals has been raised to Rs
60,000 per annum from Rs 18,000 earlier. This apart, the state has also increased the
scope of amnesty scheme in professional tax. Other tax measures include allowing input
tax credit on old plant and machinery, and upward revision of the slab for additional 1
per cent stamp duty on all properties whose market value exceeds Rs 30 lakh, against
the earlier limit of Rs 25 lakh.
A steep expenditure is expected to raise the state's outstanding debt to a record Rs
2,75,157 crore, against Rs 2,50,837 crore this year. In 2014-15, the state government
would raise Rs 25,054 crore as market loan, against Rs 23,438 crore this year.