Notwithstanding the minister’s efforts to airbrush the condition state’s finances, the financial statement clearly showed that tough times are ahead. Expenses of the government are rising while its receipts on both capital and revenue account are falling.

The financial statement said slower growth of the state’s income due to the global recession, drop in tax collections and the burden of the Sixth Pay Commission are the reasons for the increase in fiscal deficit.

The state will incur additional non-plan revenue expenditure of Rs 17,957 crore on account of the Sixth Pay Commission and new schemes in health, education and social welfare sectors announced by Chief Minister Mayawati.

On the receipts side, against a target of Rs 32,313 crore from stamps and registration duties, excise, commercial tax and motor transport tax, the actual collection this year is likely to fall short by Rs 3,121 crore. For 2009-10, the target is Rs 33,455 crore.

The collections from VAT are the worst hit. Against a target of Rs 19,705 crore during 2008-09, the actual collection is likely to be less than 15,000 crore. For the current fiscal, the government has revised the target at Rs 17,178 crore.

What is even more worrying for the government is the shortfall in internal borrowings and small savings. During 2008-09, against a target of Rs 23,930 crore from internal borrowing, only Rs 10,704 crore actaully materialised — a shortfall of Rs 13,225 crore. The borrowings from small savings were down by Rs 3,350 crore.

Though the minister did not mention measures for mobilisation of additional resources, the annual financial statement indicated that user charges in state-run hospitals and other social services may be revised.

The government is considering a proposal for increasing the license and royalty fee on mining. A threefold hike in the inspection fee charged by the Electrical Safety Directorate has also been proposed.

Non-tax revenue is also proposed to be increased as per the recommendation of the third state finance commission. Proposals are also pending before the Irrigation Department for increasing the revenue from the vast network of canals and state-run tubewells. These measures, though, will serve only as palliatives.

New schemes

* 100 more madarsas, offering education up to 12th standard, added to the state aid list

* Arabic and Persian university in Lucknow

* Grant for UP Urdu Academy increased two-fold

* 30,000 weavers of the minority community to get employment

* A new power plant of 2,000 MW in collaboration with Neyveli Lignite Corporation to be set up in Fatehpur, an initial provision of Rs 50 crore made in the budget

* 2,200 new buses to be added to the fleet of UP State Road Transport Corporation