The Finance Minister in 1998-99 budget will have to make following provisions of first liabilities namely :

• Rs.7777 crores are required to be transferred to the states as their share from VDIS scheme collection of Rs.10000 crores.

• Additional provisions of Rs.10000 crores towards only interest payment liability which will be Rs.78000 crores in 1998-99 budget which was Rs.68000 crores in 1997-98 budget.

• Additional Rs.13500 crore for the year 1998-99 towards Pay Allowances of the Central Government Employees and total pay bill will be about Rs.45,000/- crores for the year 1998-99.

INTEREST LIABILITY :

Shri Manmohan Singh Minister of Finance in his budget speech of 1991-92 has mentioned in para 28 of his speech for interest payment as under :-

"The increasing levels of non-plan expenditure Finances through borrowings, have led to an exponential increase in interest payments by the Government. The revised estimates for interest payment during 1990-91, at Rs.21850 crores accounted for as much as 38 per cent of the net revenue receipts of the Central Government. Interest Payments during 1991-92, estimated at Rs.27450/- crores, constitute 42 per cent of the net revenue receipts of the Central Government at existing rates of taxation. If the present trends continue without any correction, then interest payment could well account for more than 50 percent of the net revenue receipts of the Central Government by 1994-95. These magnitudes and proportions only serve to highlight the gravity of the situation and the acute need for a substantial adjustment in non-plan expenditure over the next three years."

"The single largest component of non-plan expenditure is interest payments. Even if there is a drastic reduction in Government borrowing during this year, interest payments would still be in the range of Rs.35,000 crores in the next financial year. The exponential increase in interest payments can be brought under some measure of control, by 1994-95, only through a strict discipline on Government borrowing for a period of three years."

Shri Manmohan Singh Minister of Finance could not control borrowings and only interest payments liability has increased from Rs.27450 crores for year 1991-92 to Rs.68000 crores for year 1997-98. The internal debts and other domestic liability were Rs.282733 crores in year 1991 which has increased to Rs.615023 crores for year 1997.

SALARY AND ALLOWANCES :

The Fifth Central Pay Commission had recommended revised pay scales and allowances from 1.4.1996 and estimated liability of Rs.11500 crores for only arrears of pay allowances and Rs.8500 crores fresh liability every year towards pay and allowances. The Central Government could not resist the agitation of Central Government Employees and granted Rs.17500 crores towards arrears of salary and accepted liability of Rs.11500 crores per year towards pay bill. The following chart gives the figure of gross revenue receipts, interest payment liability pay bill, etc.

The above figures show that interest payment liability is increasing by Rs.8000/- crores per year and additional Rs.11500/- crores as per agreement will have to be provided every year towards pay and allowances making total additional liability of around Rs.11500/- crores every year. The Central Government is levying new taxes every year to the extent of Rs.1500 crores to Rs.2000/- crores. The Finance Minister has to explain how the Central Government is to meet additional liabilities of Rs.21800/- crores in year 1998-99 from revenue receipts. All the states of India are having deficit budgets and there will be additional liability of Rs.25,000/- crores towards salary bill every year for states as State Government, Panchayats and Corporation employees will have to be granted Central Pay scales by the respective states. The Central Government and States have invited debt-trap as our politicians have tried to please 40 lakh employees of Central Government at the cost of welfare of rest of population.

It is high time that all political parties should unanimously bring suitable legislation as provided under Article 292 of Constitution of India restricting total amount of borrowing during each year, otherwise within four years entire revenue receipts will be spent towards payment of interest and pay allowances and pension and there will be no surplus for even Defence, subsidies and development works. All political parties should adopt wage policy for the work done by a worker or an employee should not adopt adhoc decision for wages which ultimately affect economy of Nation and ultimately invite debt-trap for Nation.

* Article published in I.T. Mirror, March 1998.