l02

THE GAZETTE OF INDIA EXTRAORDINARY

[PA»T I-SEC. 1]

was presented to Parliament a few days ago. I shall, therefore, refer only to a

few major developments which have a bearing on the formulation of the next

year's Budget.

3. In many ways, the year that is now drawing to a close has been a very

•difficult one. Some of the difficulties such as the inadequate performance of the

economy, the sluggishness of the capital market, the pressure on the balance

of payments and the rise in the prices of essential commodities have been with mi

now for a number of years; and it is imperative that budgetary and, indeed, all

economic policies are framed with Q view to reversing these adverse tiends. At

the beginning of the current fiscal year, it was our hope that the subsiantiaJ

improvement in agricultural production and national income which had taken

pluce in 1964-65 would maki? it possible to bring about n corresponding improve-

ment in the general economic situation. Thir; expectation, however, has not

been realised as a result of a number of unforeseen adverse happenings. Apart

from the unprecedented failure of monsoons during the current year, we have

had to reckon with hostilities on our borders and a pause in foreign aid,

4. Honourable Members will recall that the Budget for 'the current year at

presented in February last had forecast a small overall surplus-

In the early

part of the year itself, however, it became apparent that supplementary measure!

for raising revenues were necessary to keep to oin resolve r.[ avokrni? deficit

financing. Accordingly, the supplementary budg?t presented lust August provided

lor additional revenue measures vvith a yield of over Rs. 100 cro ed for I'it; rest

of the current financial year.

Since then, the budgetary outlook has become

worse.

On present indications, the current year will close with a large deficit

of about Rs. 165 crores. As compared with the original Budget estimates, taken

together with the effect of the supplementary budget, the revenue account is

now likely to show a shortfall of Rs. 53 crores. The maior deterioration of about

Rs. 112 crores, however, is likely to be on capital account.

I do not propose

to burden Honourable Members with details of the variations that ar? likely to

occur on the revenue and capital account in relation to our earlier estimates. 1

.shall, therefore, mention only those changes which have some relevance for the

future,

3. Under revenue, receipts from Income and Corporation

taxes

are

now

expected to show a shortfall of the order of Rs. 73 crores. On the other hand,

Customs receipts are likely to be Rs. 31 crorcs more and Excise revenues Rs. 18

crores more; total tax receipts will, therefore, fall short by Rs. 26 crores.

6. As for revenue expenditure, Honourable Members will appreciate that the

hostilities on our borders that were started last August have made it necessary

to increase the outlay both on defence and border security. Revenue expenditure

on defence is expected to show on increase of Rs. 20 crores over earlier estimates,

.grants to States for. border security, Rs. 64 crores, and payments for Police

Battalions raised by the States for the Central, Rs. 1J crores, making a total

increase in expenditure under these three items of Rs. 28 crores, The net result

of these and other variations on the revenue account is that the estimated

revenue surplus of about Rs. 335 crores will now be reduced to Rs. 282 crores.

7. On capital account, the major developments are a shortfall of Rs. 43 crores

to respect of external assistance and an addition of Rs. 100 crores by way of loan

assistance to the States which will not be recovered during the current 3'ear iself-

In response to the general weakness of the budgetary position of the States as

"well as the need to enable the'Statcs to undertake special agricultural programme*

on an emergency basis, Central assistance by way of loans to the State Govern-

ments for their Plans had to be increased by Rs. 40 crores. In addition, it is

estimated that loans of the order of another Rs. 45 crores will be needed over the

year to strengthen the budgetary position of some of the States. An ,,ddition«l

amount of Rs. 10 crores was given to the States as loans for the purchase an*

distribution of fertilizers. Loans to the States in respect of Small Savings will b«

larger by Rs, 5 crores. The requirements of the public sector concerns, notably,

the Heavy Electricals, the Indian Oil Corporation, National Coal Development

Corporation and Neyvell Lignite are also likely to bo higher. On the other hand,

some savings in capital expenditure on a number of heads

may reasonably b*

expected,

8. Honourable Members will note that the net deterioration of Rs. 112 crorw

«n capital account is really explained by two major factors, namely, additional

loan

assistance to the States

and the shortfall

in external assistance.

Tl»

decline In Central tax receipts of the ord - of Rs. 26 crores represents less than

U per cent of total tax receipts. Further, considering the gravity of the situation

[PAUT I-Sic. I]

THE GAZETTE OF INDIA EXTRAORDINARY

IQJ

that we had to contend with, the increase in revenue expenditure on defence

and border security has been modest.

The shortfall

respect of external

assistance is naturally a matter which is largely beyond our control. But for the

additional liability of Rs. 100 crores by way of loan assistance to the States, not

recoverable within the year itself, the overall deficit in the Centre's Budget this

year would have been only Rs. 65 crorps. Even so, Honourable Members, I am

aure, will agree with me that the developments during the current year nre a

matter of concern and call for a greater degree of realism in budget-ma!- ng as

well as greater sense of determination In restraining expenditures, whether revenue

or capital, whether Plan or non-Plan, whether by the Centre or by the State*.

9. T cannot emphasise too strongly that the weakness of the financial position

of the States and the tendency on the part of some of them to resort to unauth-

rised overdrafts from the Reserve Bank are matters which have to be remedied.

The responsibility which we have assumed so far to clear these

overdraft!

inevitably strains the Centre's budgetary position. But this strain is bound to

be reflected in turn in the Centre's ability to help the States in respect of their

Plans. Unauthorised overdrafts and deficit budgeting by some States inevitably

have repercussions on other States which are better able or more willing to

manage their affairs on a more realistic basis. Both the Centre and the State

Governments .taken as a whole, therefore, have to share the responsibility for

ensuring that unsatisfactory budgetary practices such as budgeting for deficit

and unauthorised overdrafts from the Reserve Bank are avoided in future by

adopting common standards of discipline. We propose to devote urgent attention

to the problem in consultation with the Planning Commission

and

the State

Governments to ensure that the present unsatisfactory

situation in regard to

financial management by some States does not continue.

10. The Budget of the Government

India

for

the year

1966-67 will

necessarily have to be framed in the light of the budgetary developments during

the current year which I have just outlined.

As mentioned at the outset, it

must also take into account recent trends in the economy and the continuing

requirements of defence and development. The year 1266-67 is the first year of

the Fourth Five Year Plan. The Budget for 1966-67, therefore, should give to the

Fourth Plan as good a start as is possible consistent with the Immediate ne«d to

restore a greater measure ol monetary and price stability.

Honourable Member!

will also appreciate that while it has always been our policy to restrict expendi-

ture on defence to the maximum extent possible so as to conserve all possible

Bourcei for securing the well-being of our people, we cannot afford to take any

chances with the security of the nation, devoted though we are to the cause of

peace.

11. Honourable Mernbers are already familiar with the major strands in the

country's economic situation.

The substantial improvement in agricultural pro-

duction that took place in 1964-65 could not be sustained In the current year on

account of adverse weather conditions.

Although

precise

estimates

agricultural output in the current year are yet available it is clear that there would

be a substantial decline in the output of foodgrains as well as a reduction, In

varying degrees, in the outturn of commercial crops such as jute, mesta, oilaeedt,

tobacco, tea and cotton. Honourable Members would, T am sure, like me to tai»

this opportunity to express our gratitude to friendly countries and internatiowd

institutions, and particularly to the Government and the people of the United

States, for agreeing to supply to us substantial quantities of foodgrains at a time

of need. F.von with this help, however, the availability of essential foodgraina

and agricultural raw materials during the coming year would be considerably

restricted so that it becomes more necessary than ever to restrict the expansionary

Impact of Government expenditure in general.

12. The growth in industrial production has also slackened during the current

year. During the first six months of 1965-66, industrial production increased by

T-3 per cent over the corresponding period of 1964r-65. During the second half ol

the current fiscal year, however, Industrial production Is expected to Increas*

by only 5 per cent so that over the year as a whole we are likely to have an

increase of about fi per cent in industrial production.

Our continuing develop-

mental efforts arc showing results. Capacity in a number of industries guch as

those producing finished steel, aluminium, engineering goods and chemicals ha«

been increasing steadily and can be expected to increase further in the coming

year. On the other hand, the shortage of domestic raw materials and our inability

to compensate this by larger imports has seriously contributed to the sluggishnew

•r industrial production In recent months.

IO4

THE GAZETTE Of INDIA EXTRAORDINARY

{TAW I-SKL 11

13. Superficially, it might appeal- that our balance of payments position has

ihown some improvement during the current fiscal year. In 1964-65, for example,

our foreign exchange reserves declined by Rs- 72 crores. By contrast, it may

well be possible for us to avoid any decline in foreign exchange reserves during

196o-66 with the help of a net drawing from the International Monetary Fund of

Rs. 11-9 croies. But we have been able to stem the decline in our already

depleted reserves during the current year only on the basis of a highly restrictive

import policy. Fresh licensing for imports lor the maintenance of the economy

during the current year has been on a very restricted basis; and this is already

beginning to affect industrial production despite

substantial decline in the

inventories of Imported materials and components within the country.

14. Over the months to come, our needs for inescapable imports of foodgrains

and agricultural raw materials will increase as a result of the drought

It will

also become even more difficult than before to maintain the exports of some of

our agricultural products in the face of a decline in production. Difficult as the

foreign exchange situation has been and, indeed, is likely to be over the months

to come, 1 think it would be self-defeating tm intensify or even to maintain the

present severity of our import restrictions. What we need, Indeed, Is a signifi-

cantly larger flow of maintenance

imports

over the coming months so that

inventories within the country aro restored to normal levels and capacity already

created is utilised, as fully us possible. It is only on the basis of a more liberal

import policy that we can hope to give a fresh momentum to industrial production

and greater regard for efficiency all round in the immediate future. Situated as

we are at present, it is not possible for us to undertake a more liberal licensing

of essential imports of raw materials and components without external assistance

In suitable forms.

But Honourable Members may bo sure that it will be the

constant endeavour of this Government to seek the cooperation of international

Institutions and friendly foreign governments to reduce the severity of our present

import restrictions.

15. Over a period, however, our ability to maintain imports at satisfactory

levels and to meet external obligations such as those for the repayments of debt

will necessarily have to turn on our own efforts to increase our foreign exchange

earnings not only by higher exports but also by way of increase in invisible

receipts from tourism, remittances, shipping and the like. During the first three

years of the Third Plan period, there was a rapid increase in our exports which

was all the more gratifying for the reason that it took place despite the fact thai

the growth of production within the country failed to come up to expectations.

The same momentum in exports, however, has not been maintained during the

past two years; and we are confronted in the immediate future with Ihe potent

possibilitv that the drought

might

affect

adversely some of our agricultural

exports.

18. Fundamentally, we cannot give a continuing impetus to our export effort

without increasing production and productive efficiency all round and without a

check on general inflationary pressures within the country. While efforts in these

directions are required on a continuing basis in the interest of higher export

earnings as, indeed, of development along sound lines, we have not nesitated to

adopt a number of measures to give specific

incentives for promoting higher

exports. The Tax Credit Certificate Schemes introduced during the year and tha

import entitlement schemes which have been in operation for some time are

examples of the inducements we offer at present to promote higher exports. More

recently we introduced the National Defence Remittance Scheme and I am happy

to say that the response" to the scheme has been encouraging. It Is in view oi

this that the scheme has been extended now by another three months though a

second look may have to be taken to lower the rate of benefit inherent in the

«chome. We shall continue to review, modify and extend the export promotion

measures that we have designed in the light of our needs and experience to make

•ure that they continue to provide a strong, stable and comprehensive basis for

a Ylgorous export drive.

17. With the best will in the world and the utmost effort we are capable ol,

we still cannot dispense with foreign aid in the near future. We m India have

always recognised that foreign aid can at best supplement our own efforts to

raise both internal and external resources. No self-respecting nation can ever

look upon external assistance as a substitute for reasonable effort on its own part

or as a continuing feature of its economy. It is also both natural and unavoidable

that the willingness of our friends abroad to assist us will depend on the confidence

that we are able to inspire in our ability to grapple with our problems and to put

«uch aid as we get to the best possible use. Only so can we hope, before long,

*i Hi^r n

- -ith --+•--•••

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•

(TAIT I-6EC 1]

1 rfX GAZtTl IE VV INDIA EXTRAORDINARY

ICtf

hopeful that the Consortium organised under the leadership of the World Bank

will approach the task of mobilising external assistance for our Fourth Plan la

the same constructive way as it has done in the past for our Second and more

particularly for our Third Plan. At the same time, Honourable Members will

appreciate that the Plan itself and our policies in support of the Plan have to be

consistent not only with reasonable developmental goals but also with a greater

determination on our part to rely increasingly on our own strength and resources.

18. I would like to refer, in particular, in this connection, to the need to reduce

our dependence on assistance under the United States PL 480 programme for tne

impoit of foodgrains and other agricultural commodities. Honourable Members

will have, I am sure, every opportunity to review the measures that wo have set

in motion for achieving a substantial increase in agricultural production during

the Fourth Plan period.

I have to emphasise in particular the fact that our

budgetary position also has come to lean heavily on the import of agricultural

commodities under the PL 480 programme. We cannot possibly regard a large

accretion of resources to the Budget from PL 480 transactions as anything but a

fortuitous counterpart of our difficulties on the agricultural front.

The fact that

we depend today to such a large extent on the PL 480 programme for supple-

menting our budgetary resources emphasises once again the need for caution In

regard to governmental expenditure as well as for exploring every available

opportunity for raising more internal resources.

19. More and more, the possibility of raising additional internal resources will

depend on the growth and dynamism of the Indian economy itself. Whichever

way we look at it, therefore, it is of paramount importance to improve the per-

formance of the economy by raising productivity both in agriculture and industry.

From this point of view, I attach importance to strengthening and

maintaining

the confidence of the private sector as also to the more efficient working and

management of our growing family of public enterprises. It is not necessary for

me to dwell at any length on the malaise of the capital market which has

continued now for more than three years. While we have endeavoured to meet

the genuine requirements of private industry for investment by greater assistance

from financial institutions, there cannot be any doubt that thn revival of the capital

market and a greater flow of private savings to Industry hi the form of equity

investment are desirable hi the larger social interest- A democratic society

desiring rapid development both in the public and the private sector but averse

to concentration of wealth and economic power has all the more reason to make

investments in the private sector as widespread as possible. Growth of private

Industry in such circumstances must depend more and more on the equity parti-

cipation of a growing number of people drawn from different strata of society.

More widespread equity participation would also facilitate stricter control on

management in the private sector.

20. In the monetary field, till recently, a great deal of stringency has bee»

felt despite the fact that the supply of money has continued to increase at m

much foster rate than the suoply of goods and services. Given the developments

In the budgetary field to which I referred earlier, it is not surprising that money

Bupply has increased at a faster rate than what had been envisaged. But clearly

the .combination of monetary stringency and a rapid increase in money supply la

an indication of the fact that genuine savings have not increased adequately and

that a part of these have been diverted to less desirahle forms of Investment.

We cannot relieve monetary stringency by continuing to increase money supply

at the same rapid rate as wo have done over the pL-st few years. To do so

would only aggravate , the inflationary

situation in the

country.

Honourable

Members are well aware that the general price level In the country has shown a

significant increase of 7'fi per cent during thd 12 months ending January 1966.

While the Reserve Bank will continue to deploy flexibily the instruments of

monetary policy in keeping with the genuine requirements of credit for achieving

higher levels of production, we shall have to make sure that the expansion of

credit for legitimate purposes takes place increasingly on the basis of growth of

deposits and at the expense of credit expansion for less desirable social purposes.

Indeed, quite apart from these considerations. It is essential to ensure that lend-

ing by the banking system is directed towards socially desirable objectives such

as greater economic opportunity to a wider spectrum of producers and the pre-

vention of undue concentration of wealth and economic influence.

21. I may now sum up the main considerations which have guided me In

framing the next year's Budget in the ll?ht of the developments, to which I have

referred so far.

First and foremost, the Budget has to be production oriented.

creating a hoitr¹- psychological climate for a greater regard to savings and efnei-

oicy all round

Secondly, while investments In progress have to be completed

Io6

THE GAZETTE OF INDIA EXTRAORDINARY

[PAW l-^fiio. 1)

as speedily as possible in the interest of better performance of the economy and

while the claims of national security have to be met, every effort has to be made

to restrain Government expenditure, particularly on general administration and

on new schemes of development with a long gestation period. With the res-

traints just indicated it is proper to state that it is the intention of this Govern-

ment to establish progress and press on with such enterprises In the public sector

as ara benerioient to the country. The Bokaro Steel Plant made possible with

the assistance of the U.S.S.R. to whom we arc grateful is one such project. I

have also endeavoured to estimate revenue and capital receipts on as realistic

a basis as possible.

22. Coming now to the estimates of next year's revenue expenditure, Honour-

able Members would appreciate that certain Increases are almost automatic in

the sense that they result from decisions already taken in the past or from Con-

stitutional obligations. Transfers to Stated on the basis of the recommendations

of the Fourth Finance Commission will, for example,' lead to increase in expendi-

ture of Rs, 77 crores under Statutory Grants and Rs. 67 crores under States'

share of Union Excise duties. The cost of servicing debt will increase by Rs. 42

crores and export promotion measures and the various tax credit schemes already

adopted will result in an Increase in expenditure of another Rs. 24 crores. If

these special items and certain self-balancing items such as PL 480 Grants, Emer-

gency Risks Insurance Scheme and write back of Capital Grants are excluded,

revenue expenditure next year will show an

increase of only

RE. 46 crores.

While Plan expenditure on revenue account is less by Rs. 36 crores, the increases

are accounted for by Rs. 29 crores under Defence Services, Rs. 14i crores unaer

Police, mainly for requirements of bolder security, Ra. Hi crores under grants

for drought relief and Rs. 6 crores to Union Territories to cover their budgetary

gaps. Administrative Services proper, excluding Police, would cost Rs. 99 crorea

next year as against Rs. 93 crores this year and Rs. 83 crores last year. The ia-

erease of Ra. 6 crores next year includes Rs. 2i crores on account of next year's

election expenses. The balance of the increase In revenue expenditure after

excluding reductions under subsidies and aid, namely, Rs. 18 crores, occurs most-

ly under non-Plan developmental heads,

and Includes committed

expenditure

arising out of the completed Third Plan Schemes. Honoura~blo Members would

appreciate that the small Increases I have just mentioned represent a considerable

effort at economy and restraint. Most of the increases are in respect of obliga-

tory expenditure or Items like Defence expenditure and border security which

In view of the circumstances that we have to contend with, cannot but be re-

garded as absolutely unavoidable.

23. Disregarding certain se^-balancing items, next year's revenues should

show an increase of Rs. 191 crorea as compared to the revised estimates for the

current year. Customs duties axe estimated to yield Rs. 29 crores more mainly

because the increases in duties already made would yield results now over a lull

year. Receipts from Excise duties are expected to increase by Rs. 108 crores

mainly in response to larger production and clearances of petroleum products

from the new refineries as also of cement and Iron and steel. Considering tne

experience this year and the fact that the current year's receipts include a cmisi-

derable portion of tax from voluntary disclosures, I have assumed that receipts

from Corporation and Income taxes next year will be higher by only Rs. 20 crores.

24. Taking Into account the factors that I have mentioned and a number ol

other miscellaneous Items, total revenue receipts next year at existing levels of

taxation are estimated at Rs. 2017 crores and expenditure on revenue account at

Rs. 2407 crores.

The revenue surplus of Rs. 210 crores next year will thus be

Rs. 72 crores less than the revised estimates for the current year.

25. On capital account, I have assumed external borrowings of Rs. 4flO crnrea

as against Rs. 490 crores in the current year. This is exclusive of fresh accre-

tion of PL 480 funds of Rs. 230 crores. Market loans have been assumed at

Rs. 280 crores, about the same as in the current year. However, since repay-

ments next year are substantially higher, the net market borrowing at Rs. 88

crores next year would be Rs. 22 crores less than that during the current year.

It is, therefore, my hope that the target for market borrowing next year will be

fulfilled without any significant support from the Reserve Bank over the year

as a whole. Honourable Members would recall that since last October, we have

floated emergency market loans on tap. In view of the consolidated market bor-

rowing programme now proposed for the next year, the emergency loans on tap

will be discontinued at the end of March.

[PAJTT l-ma. 1]

TH» GAltTTE OF INDIA BXTRAOUHNAftY

r&^

26. On Small Savings and Annuity Deposits, I have assumed no net increase

over the anticipated outcome OL the

current year. After

taking account

receipts under repayment o± kau.;,

accretions undor

miscellaneous debt

and

depuiit heads ana iii^ rovonu.- surplus of Ra. 2KI crnre'j, the total budgetary

resources in sijht for total cM:'jii;:l outlay next year, both Plan and non-Plan,

would be ol the order of Rs. 1835 crores.

27. I have considered whether the capital outlay next year could not be res-

trained wilhin ttv limits set by resources in sight to which 1 have? just referred.

Unfortunately, while total capital outlay ne\t year, excluding the notional adiust-

ment of PL 480 loans, and loan disbursements, would show a significant reduc-

tion over the current year's level, it has not been possible to restrict the outlay*

within the strict limits set by resources in sight. Here again, there are a num-

ber ol ILems such as debt repayments where an Increase in outlay is unavoid-

able. Debt repayments next year at Rs. 314 ciores would be larger by Rs. 45

crores in relation to the current year. While there Is practically no increase in

defence capital outlay next year, an additional provision of Rs. 20 crores is re-

quired for giving loans for the purchase and distribution o* !• rtili?ers, seeds and

pesticides and of Rs. 12 crores for loans for drought relief. Tho provision for

contribution to financial institutions will also be larger by Rs. 7J crores.

28. In regard to Plan schemes also, expenditures on continuing schemes have

to be provided for in the interest of speedy implementation,

especially

whett

foreign exchange provision for their import requirements has already been made.

Some of the important Increases that have been pronos_-d in the next year relate

to the Bokaro Steel Plant and the development of Atomic Energy which hav*

been allotted Rs. 13 crores and Rs. 18 crores more respectively. On the other

hand, Plan assistance to the States and the Union Territories bv way of loans

has been curtailed by Rs. 135 crores and capital outlay on Railways has been,

reduced by Rs. 59 crores. On balance, and after taking into account a number

of miscellaneous items, total capital outlay including loan disbursement and debt

repayment next year will amount to Hs. 10i>2 erores thus showing a reduction ot

Rs. 296 crores as compared with the current year.

29. In termg of Plan, outlay, the Centre and the States next year are expected

to spend Ra. 2081 crores, that is, Ra, 144 crores less than the current year's budget-

ed Plan outlay of Rs. 2225 crores. The State Plans excluding that of Nagaland

will account for an outlay of Rs. 926 crores and the Central Plan, an outlay of

RE. 1155 crores. Of the States' outlay, Rs, SOS crores will be financed by Central

assistance and Rs, 421 crores from the resources of the States concerned. The

Centre's Plan will be financed to the extent of Rs. 189 crores from the Internal

resources of the Railways, the Posts and Telegraphs Department, the Hindustan

Steal, the Indian Oil Corporation, the Oil and Natural Gas Commission and other

public sector enterprises. Including the foreign exchange resources tu be mobili-ed

by them directly. For the balance ot R.s. 1471 crores, Inclusive of Rs. 505 crere*

of Central assistance to the States, Rs. 56 crores for the Union Territories and

RE. 4 crores for Nagaland, as also Rs. 143 crores for the Central Plan on Revenue

account, provision has been included in the Budget.

30. The distribution of the Plan outlay under different heads takes Into account

the higher priority that needs to be Riven at the present stjge to quick; yielding

programmes of agricultural development and to the speedy implementation of

projects already in hand. To a certain extent, a comparison hotwiea the Plan

outlay next year with the Plan provision for the current year is misleading In

the sense that a part of the outlay included in the Plan during a Plan period b_>-

comes committed and gets treated as non-Plan outlay from the beglnnin { of Ihe

next Plan period. Even so. there is no dpnyinfi the fact that the exigencies of

the budgetary situation have made it necessary to exercise the utmo i caution

In regard to both Plan and non-Plan expenditure durlTg the comins y a-. The

gap between resources in sight and total provision for expend'ture in the Centre's-

Budget to which I will now turn has to be Judged in the light o* this considera-

tion.

31. The overall budgetary position for the next year may now be summarised

In conventional terms as follows. The revenue account will yield a surplus of

Ra. 210 crores. The total disbursement on ca-jltal account, excluding the notional

adjustment of PL 480 Loans, will be Rs. 1952 crores. This wll be met, apart

from the revenue surplus, by internal and external borrowi gs of Rs. 744 crorea,

collections under Small Savings of Rs. 135 crores, fresh accretl-n to PL 480

Funds of Rs, 230 crores, Annuity Deposits of Rs. 44 crores, repayment of loan*

of Ra. 370 enrtea and receipts under miscellaneous debt and deposit heads ol

Rs. 102 crores, leaving an overall deficit of Rs. 117 crorw.

log

THE GAZITIT OF INDIA EXTRAOWHNAfcT

tPAar I-fco 1]

32. In the light ot what 1 Lave saut earlier, Honourable Members would have

gathered that I would have very much liked to avoid a deficit by the simple

method of containing revenue expenditure and capital outlays within the re-

sources available. 1 have explored this possibility to the maximum.

Revenue

expendiime has been hcia iluwu. lu the case of Plan outlays, however, it Is

necessary to provide J!or what is required for securing essential and productive

•development, partici^arly in regard to agriculture and other continuing schemes.

Consistent with this, Plan outlays have also been kept down to the minimum.

A further reduction would retard agriculture and jeopardize the growth of the

economy

33. It Is, therefore, imperative for me to cover the deficit by raising addi-

tional resources. This I have sought to do by methods which cause minimum

•disturbance and hardship and ensure maximum simplicity.

Honourable Members

would recall that in presenting the l^st Budget my predecessor had emphasised

the importance of stability and simplicity in the tax structure in the interest of

providing a proper climate of expectations for orderly growth. The supplemen-

tary budget introduced last August took this process a step further, particularly

in regard to the rationalisation of import duties. I have kept these basic objec-

tives clearly In view in proposing measures for raising additional resources. Even

in so doing, I have sought to carry the process of simplification a step further

by proposing a number of changes and reliefs. I shall now explain my proposal*

in detail.

34. Starting with indirect taxes, I propose to leave customs duties alone as

they were rationalised a'ld raised only a few months ajj;o. I, however, propose

to Increase the excise duties on a few commodities, not simply for raising revenue

but also for restraining consumption where this can be done without too much

hardship and increasing exportable surpluses. Two commodities, namely, optical

bleaching agents and synthetic detergents will be subject to duty for the first time.

35. The excise duty on crystal sugar will be raised from Its. 28:85 to Ra. 37

per quintal. Correspondingly, the duty on khandsarl will also be raised. Taken

together, these will bring in additional revenue of Rs. 21-93 croreg, Assuming

the duty Is passed on fully to the consumer, the incidence will be only 8 to 9 palae

per kilogramme of crystal sugar. As supply is expected to be adequate to meet

demand, there is some prospect that the whole of the duty may not be parsed on

to the consumer.

36. The duty on cigars and cigarettes, as well as on unmanufactured tobacco

-tor use in the manufacture of cigarettes and Dipe mixtures, will also be raised b j

about 25 to 30 per cent. These increases are expected to yield additional revenue

of Rs. 9'01 crores. The incidence of this increase will be about 5 palse per

packet of expensive cigqrettes and 1 to 2 palse per packet for the relatively

cheaper ones.

37. The exri.se duty on diesel oil not otherwise specified, that Is, light dlesel,

Is proposed to be raised by Rs. BO per kilo litre in order to bring it in line with

duties on other petroleum products, so as to avoid undesirable mixtures. The

additional revenue expected is Rs. 6-35 crores.

38. In order to restrain consumption of finer qualities of cloth which require

Imported cotton, I propose to increase duties on cotton yarn and cotton fabrics

selectively. There will he no increase in the case of coarser counts of yarn. In

the case of fabrics, the Increase will be only in respect of processed products such

as mercerised shrink-proof and organdie processed varieties. The additional re-

venue from increases in the duty on yarn is expec'.ei to be Rs. 7"23 crorea and

on fabrics Rs, 6-3 crores. Correspondingly, the duties on rayon and synthetic

yarns are also being slightly raised and the revenue yield will be Rs. 50 lakhs.

39. The excise duties on a few other items, namely, sodium silicate and carbon

dioxide are also being raised and the slah concessions on paper boards are being

reduced. The additional revenue expected from these three items is Rs. 1-46

crores. The new duties on optical bleaching agents and synthetic detergent* are

•expected to bring in Rs. 58 lakhs. In order to give some relief to small establish^

meats which manufacture motor vehicle trailers, the ad valorem duty of S per

cent on such trailers as are manufactured In establishments employing not more

than five workers will be abolished. Altogether, the additional yield from the

change* In excise duties proposed, together with rorres^oniing Increase In cotmttrr-

vailhig duties, will be Rs. 52-86 crores of which the States' share wi'l be Rs. 10-07

mires

Ihe Central lesouices, thei-efore, will be augmented by Ha. 42TO crorea.

J»A*r h-m*. i)

THl GA2XTTS Of INDIA EXTRAORDINARY

I o ^j

40. I shall now turn to direct taxes. In the field of personal taxation, I pro-

pose to Increase the existing limits of total Incomes not chargenble to tax by

Rs. 500. Similarly, I propose to raise by Rs. 500 the existing pe. sonal allowances

on which tax relief is given to resident individuals and Hindu undivided families.

Thus, the exemption limit in the case of individuals will be raised from Rs. 3,000

to Rfl. 3,500, the personal allowance of an unmarried individual, 1rom Hs. 2,000 to

Rs. 2.500, and the personal allowance of a married individual with more than one

dependent child, from Rs. 4,300 to Rs. 4,800. The effect of these will be a reduc-

tion In revenue by Rs. 3 5 crores. The principal reason is to provide a measure

of relief to a class of tax payers who merit their burden being lightened. But

these measures will also accelerate the performance of the task of the tax authori-

ties by eliminating a large number of small assessments and thereby enabling

them to devote more aud s>wift attention to tax collections from higher income*

41. For similar reasons, I also propose to raise the exemption limit for an-

nuity deposits from Rs. 15,000 to Rs. 25,000. By this measure, the number of

people required to make annuity deposits will be reduced sizeebly from 1,78,000

to 80,000, while the reduction In receipts will only be of the order of Rs. 7 croreg,

after taking into account the corresponding gain to income-tax of Rs. 2 42 crorea.

I have, however, provided that even those in the income range of Ra. 15,000 t*

Rs. 25,000, who desire to make annuity deposits, will be enabled to do so and

obtain the consequent tax relief on the amounts so deposited. Another am all

change which I propose to make is to provide that persons on attaining the age

of 70 will hereafter be allowed to opt out of the Annuity Deposit Scheme, irres-

pective of whether they were liable to make annuity deposits before or not.

42. Having given these reliefs, I propose to levy a flat special surcharge ot

10 per cent of the amount of income-tax and lurrharge In respect of earned in-

come and unearned income, payable by all non-corporate assessecs. The addi-

tional revenue from the special surcharge will be Rs. 25-6 crores.

•43. In regard to other personal taxes,

I propose to abolish the expenditure

tax. I do so far administrative reasons. The yield from this tax is very little,

namely, Rs. 00 lakhB or thereabouts which has not been commensurate with the

burden It puts on the administration and the inconvenience it causes to the

assessees. I recognise that on purely economic grounds, it would be a very sound

principle to replace the income-tax Increasingly by a tax on expenditure, so that

the maximum Incentive Is provided for savings. Given the substantial contribu-

tion made by income-tax to our revenues and the administrative difficulties an*

Inconvenience to assessecs involved IT the a=sⁿssment of expenditure, it is, how-

over, not possible to attempt this substitution on any signiflrant scale at tb*

present stage.

44. I also propose to revise the rates of gift tax in order to bring then

more closely in line with the rates of estate duty. In the process, the rates ap-

plicable to different slabs of value of gifts are also being reduced-

Thus, the

exemption limit is being raised from Rs. 5,000 to Rs. 10.000 the rate on the slab

from Rs. 10,000 to Rs. 25,000 is being reduced from 8 per cent to 5 per cent and

the rates on subsequent slabs, up to Rs. 15,00,000, by varying percentages.

The

present maximum marginal rate of 50 per cent will, however, remain unchanged,

but it will operate on the slab beyond Rs. 15 lakhs.

I also propose to deJet*

the provision for the aggregation of the value of gift3 to the same donee over

a number of years. This provision was designed to prevent avoidance of estate

duty as well as gift tax at higher rates. But it is a measure whose practical

utility is not established, specially if the time and trouble it involves on tlie part

of both the administration and the assessees are taken into account,

But to

Borne extent to balance this measure.

I propose to provide, by amendment of

the Estate Duty Act. that gifts made within two years of death will be treated

as part of the estate. At present the relevant period is one year. I have also

taken this opportunity to raise the rate* of estate duty on certain intermediate

slabs, namely, Rs. 1 lakh to Rs. 2 lakhs, from 8 per cent to 10 per cent, Rs. Zi

lakhs to R3. 5 lakhs, from 15 per cent, to 25 per cent and from Rs. 5 lakhs to

Rg. 10 lakhs, from 25 per cent to 30 per cent. The loss in revenue as a result

of changes in the gift tax will bo Rs. 1-71 crorea, whereas the additional revenue

from the changes in the estate duty, which will go to the States, win be ap-

proximately Ra. 70 lakhs.

45. I propose to make another change In respect of estate duty.

Honourable

Members will recall that my predecessor had assured this House that the estate*

of member* of police forces kill In action in defending the borders of the country

would be exempted from estate duty in

the

same manner

as members of the

armed forces. I have made a prorUIon for thia. I feel

this is a recognition,

though small, of the courage and determination of members of

this force tit

defending our country.

I I 0

THE GAZETTE OV INDIA EXTRAORDINARY

[PAJTT 1-Sna. 1)

whth *> ^{a l l y}'^X would lltoj to refer to one change In regard to personal taxation

Hono^rllP H ™^^a^{t r a n s l t l o n} to ™y proposals in rega d to corporate taxation

X ' ^r

a b l e , Members are aware that at present when an equity shareholder i*

•Hotted a bonus share, he is hable to pay income-tax on the notional capital gain

accruing to him. I propose to discontinue this provision and to provide

that

liability for tax will arise only when the capital gain is actually realised

The

toss to revenue from this measure will be only Rs. 7 lakhs.

47. I shall now turn to corporate taxation. Here again, as In the case of per-

sonal taxation, I propose to provide certain reliefs which I consider necessary for

providing a suitable climate for growth. At the same time, I propose to increase

the general rates of tax on corpo ate incomes by approximately 10 per cent

shall now explain these proposals in some detail.

48. The existing tax

of 12'5 per cent, levied on domestic companies with

reference to the amount of their bonus issues will be discontinued. The loss to

revenue will be only Rs. 9 lakhs.

49. At present, the dividend tax of 7-5 per cent on companies to which it la

applicable is, ordinarily, leviable on the whole of the dividends declared or dis-

tributed during the previous year. 1 propose now to provide that this tax will

be leviable only on that part of the equity dividend declared or distributed which

is in excess of 10 per cent of the paid-up equity capital. The loss to revenue ou

this account is estimated at Rs. 4-8 crores.

50. I also propose to reduce the rate of surtax provided under the Companies

(Profits) Surtax Act, 1954, from the existing level of 40 per cent to 35 per cent

The loss to revenue on this account is estimated at Rs. 2'5 crorea.

51. As already mentioned, I propose, simultaneously, to raise the effective rate*

of the basic corporate tax on companies. Thus, the rate of tax on profits from

life insurance business will be raised from 47; S per cent to 52-5 per cent. In

the case of domestic companies in Which the public are substantially interested

with a total income not exceeding Rs. 25,000, the rate of tax is being raised from

42-5 per cent to 45 per cent, and the rate of tax on such companies with higher

Incomes, from 50 per cent to 55 per cent In the case of closely-held domestic

companies also, the existing general rate is being increased from 60 per cent to

65 per cent, and the concessional rate applicable to industrial companies on the

first rupees ten lakhs of their income from 50 per cent to 55 per cent. In the case

of foreign companies, royalty and technical service fees under certain approved

agreements will bear the same

effective rate of 50 per as at present but their

other income will be taxed at 70 per cent, as against 65 per cent

p-esent

Similarly some fiscal encouragement needs to be given to our Industrie! to en-

courage them to provide technical "know-how" and technical services to newly

developing countries. I propose, therefore, to provide for a concessional rate of

tax on dividends received by an Indian company from a foreign company

sha-es allotted to the Indian company in consideration for supplying

technical

"know-how" or rendering technical services.

This concessional rate will be Z!>

Her cent

A simi'ar concessional rate of tax of 25 per cent will also be charged

on royalties, commissions, fees, etc., received by an Indian company from a foreign

company for supply of technical "know-how" and technical services.

The net

sain to'revenues as a result of the changes in the basic rates of corpo ate taxation

fa estimated at Rs. 43:46 crores, after allowing for the consequent reduction of

Rs. 5 6 crores under surtax.

52. Honourable Members are aware that at present we have separate schedules

of priority industries, one for equalifying for development rebate at the %^K™T

rate of 35 per cent £md the other for a concessional treatment In respect of the

tw-.iV corporate tax

I propose to extend the list of priority industries for the

SSfoaeWthl developmerTrebate by inclusion of three more Industrie!, namely

K e manufacture of tea, newsprint and P ? ^ * "ntTtoe rSl 7

win iim anolv for purposes of concessional treatment in the rate ol tan. AS •

measure of simplification, however, I propose to modify the form of the concession.

At Present Special rebate on income-tax and surtax is granted to camp*™* on

their income F m priority industries. I propose to replace thli by a *™iKht

rducticnof 8 per cent of the profits from priority Industries in computing; th«

taxable income of the companies ~«cerned. Thb £ e r t ™mer of givmg

a rebate should greatly simplify the computation erf the tax liability.

co A t oreSent 7!5 per cent, of development reb«te actually allowed i* **««}*•*

tfU*r I-&K. 1]

JHff OATETTB OF INDIA EXTRAOTLDHTAHY

H I

64. In order to provide a further Incentive for the extension and renovation

of our tea plantations, I propose to liberalise the existing provisions in the law

in regard to the grant of development allowance. Firstly, the rate of develop-

ment allowance for new planting will be increased from the existing quantum of

40 per cent, of the actual cost of planting to 50 per cent, thereof and, for replant-

ing, from 20 per cent, to '.it> per cent. Secondly, I propose that the allowance may

be granted in two stages, first, for the year following the year in which the land

is prepared for planting or replanting, with reference to the expenditure incurred

up to that year, and, as to the balance, for the fourth year.

This will replac*

the existing provision under which the whole of the allowance is granted only for

the fourth year.

M. Th« rate schedule of depreciation allowable in respect of buildings, furni-

ture, plant, machinery, etc., has become highly complicated. It is necessary to

review the position In the light of recent developments and to make appropriate

changes BO that the schedule may be both rational and simple. I propose, there-

fore to Initiate

a complate review during the next

few months. The recom-

mendations of the Worklnjj Group on Plantations Labour Housing will also be

taken into account during this review. Meanwhile, I propose to provide that tn»

cost of small item* of plant and machinery costing not more than Rs. 750 per

unit mav be allowed to be depreciated in full in one year. 1 also propose to allow

initial depreciation of 20 per cent on the cost of new buildings erected by em-

ployers and occupied or u<?od by employees d awing remuneration upto Us. i.ow

p. '• annum. At preient, tblf la allowed only In the case of buildings occupied or

wed by those drawing remuneration upto Rs. 200 per month.

88. At present when development rebate is allowed, the plant and machinery

concerned is required to be retained in the possession of the assessee for a period

ot 8 yean; otherwise, the rebate already allowed is liable to be withdrawn. When

Buch plant, however, is transferred in the course of amalgamation, including-

merger of a subsidiary company with the parent company, the development rebate

ia not withdrawn,

This Is however, subject to the qualification that the merged

subsidiary company ii an Indian company. I do not see any reason for the exclu-

sion of a foreign subsidiary as it comes in the way of merger of such companiea

with their parent companies. I, therefore, propose to withdraw this disqualifica-

tion.

57. At present, approved financial corporations which are engaged in providing

lone term finance for industrial development In India are entitled to deduct, in

the computation of their profits, an amount up to 10 per cent, of their total in-

come carried to a special reserve account.

In order to enable relatively small

financial corporations to build up their financial resources at an accelerated pace,

I propose to Increase this deduction from If) per cent, to 25 per cent, of the

total Income, in cases where the paid-up capital of the corporation doea not

exr-^1 Rs 3 crores. This will benefit mainly those financial corporations whlctt

are engaged In fostering Industrial development on a regional basis.

5R I propose to make a number of changes relating to clos«ly-held companies.

Firstly in determining whether a company -is to be regarded aa cloMly-held, I

nroDose that for such of them as are mainly engaged in certain manu-

facturing activities or in shirj-buildinff. the test of the public being substantially

interested should be regarded as satisfied if 40 per cent of the equity is held by

the Government, public corporations or members of the public, etc., instead of

60 per cent., as at present. Secondly, companies, which are mainly engaged m

shirf building will not be compelled to distribute then- profits upto the statutory

T>C centage. Companies which are only partly engaged in manufacturing activi-

ties wi'l also not be required to make a compulsory distribution of their profits

relating to such activities. Finally, certain types of expenditure mcurred by a

elosely-held company for earning its income are at present not allowed for pur-

poses of determining the tax liability. I see, however no reason why such expen-

diture should not be allowed as a deduction In computing the distributable incomer

of such a company. I propose to provide for this.

59 Honourable Members are aware that certain fiscal concessions have »lre»^dy

been announced in respect of the National Defence Remittance Scheme. Thus

Ra°ns arising on the sa^e of bank certificates obtained under the ^hem*

would be liable to tax at the concessional rate of tax applicable to

long-term

I have made provisions for these concessions m the relevant Acts.

THE GAZETTE OF INDIA EXTRA ORDTNAJLY

[PAW i-fac. IJ

60. With a view to encouraging small savings, the requirement of deduction

of tax at source will be waived, subject to certain conditions, in the case of small

investments in Government securities. Similarly, the interest on the new series

of National Savings Certificates to be issued through the State Bank will bear the

same concessional treatment as the existing series of National Savings Certificates.

In the case of income from units of the Unit Trust of India, income upto Rs. 1,000

will be excluded from total income for purposes of tax assessment in the rase of

all assessees irrespective of the amount of their other income. This should make

for simplification as well as greater incentive for investment in the Unit Trust.

61. Finally, I would like to mention some other changes that 1 have proposed

essentially in the interest of simplification or better administration.

I p.opose

that the total income of assessees should be rounded to the nearest multiple of

ten rupees and that the amount of tax. penalty, refund, etc., should be rounded

to the nearest multiple of one rupee. As a measure of curb on ostentatious con-

gumption, I propose that for the calculation of depreciation on motor cars acquired

for fhe purposes of a business or profession, purchase price above Rs. 25,000 will

be ignored. Those who are responsible under the law for deducting tax at source

will be charged, in case of default in fulfilling these obligations, simple interest ot

the rate of 6 per cent, per annum for the period of the default. Another amend-

ment relates to exemption of the income of charitable trusts and institutions from

income-tax. It 13 being provided that a charitable trust or institution will forfeit

the right to exemption if any part of its income or property is used or applied

direct^ or indirectly for the benefit of those who might be closely associated with

the trust or foundation as authors, substantial contributors or their relatives.

62 Before I sum up the effect of the tax proposals which I have exp'ained so

far i' would like to make two proposals designed to raise resources for the benefit

of the States. The first is to increase from 2 per cent, to 3 per cent, the rate of

Central Sale* Tax leviable on inter-State sales. This will come into effect from

1st July 1966. This increase will yield an additional revenue of Rs. 19 crore.s to

the States in a full year and Rs. §• 5 crores in the year 1966-67. Since the new

rates will become effective from 1st July, 1966 and since collections are carried

over from one quarter to the other, the additional yield dunnc the next financial

year will accrue only during two quarters of the year. Similarly, collections in

the Union Territoies which fo-m part of the Consolidated Fund of India will in-

crease by Rs. 1 crore in a full year and Rs. 50 lakha in 1966-67.

63. The second proposal is to raise from 2 per cent to 3 per cent, the ceiling,

prescribed in respect of salea tax on goods declared to be of special importance in

inter-State trade or commerce. This is a permissive amendment and would enable

the States to reflx the rates of local sales tax on coal, cotton, cotton yam, hides

and skins, iron and steel, jute, and oil seeds within the ceiling of 3 ^ ^ 5 ? " k i e

they so desire. If all the States raise their local sales tax rate to the permissibly

ceiling of 3 per cent, from the pescribed date of 1st July 1966, it would give them

an additional revenue of Rs. 7- 5 crores in the next financial year.

During a ful

year, however, the additional revenue, would be Rs. 15 crnres,

64. 1 shall now sum up the effect of my proposals. The 1additional yield result-

ing from the changes in the excise duties proposed will be Ks. 52-86 crores of

which the share of the States will be Rs. 1007 crores

Thej gain to.the Central

budget will, therefore, be Rs. 42-79 crores. The net effect of the changes m.regard

to personal taxation would be a gain to revenue of Rs. 22-14 crores. The additional

yield from corporate taxation, after taking Into account the concessions in regard

to the dividend tax and surtax and the elimination of the tax m b ™' l » « « . ^

be a eain to revenue of Rfl. 36 07 crores. The changes in the inter-State sales tax

which I have referred to will bring In an additional revenue of R s 6 0 lakh, to

the Centre

The total revenue effect of my tax proposals is an addition of 101-31

crores

On the capital account, there will be a reduction in the yield of annum**

draslts of RB 9 39 crores.

The total additional resources thus available for

S e i n e the deficit of Rs. 117 crores will, therefore, be Rs. 92 crore.., leaving an

-overall gap of Rs. 25 crores.

fl5 Honourable Members will note, however, that the changes I have Proposed

will also augment the resources of the States to a sifoificant extent

Apart from

their share of Rs. 10-07 crom In union excise and additional yield of Rs. 69 lakhs

taSeBpe^oI

estate duty, they will get Es 34 crores in a full year from the two

t&anges that I have proposed in respect of the sales tax.

«w Tn mnrlusion may I say that I am keenly aware that bv the compulsion

*I4

THE GAZETTE OF INDIA EXTRAORDINARY

[PAW IStc. 1}

S U M M A R Y O F

S T A T E M E N T A

R E V E N U E

B U D G E T

R e c e i p t s

• C u s t o m s

U n i o n

E x c i s e D u t i e s

• C o r p o r a t i o n T a x

T a x e s o n I n c o m e

E s t a t e

D u r y

T a x e s o n W e a l t h

E x p e n d i t u r e T a x

G i f t

T n x

O t h e r

H e a d s

D e b t . S e r v i c e s

A d m i n i s t r a t i v e

S e r v i c e s

S o c i a l a n d

D e v e l o p m e n t a l S e r v i c e s .

M u l t i - p u r p o i e

R i v e r S c h e m e s

e t c . .

P u b l i c W o r k s

e t c .

T r a n s p o r t a n d

C o m m u n i c a t i o n s

C u r r e n c y

H n d M i n t

M i s c e l l a n e o u s

C o n t r i b u t i o n s a n d M i s c e l l a n e o u s

A d j u s t m e n t s ,

E x t r a o r d i n a r y

I t e m s

D e d u c t — S h a r e o f I n c o m e T a x P a y a b l e t o S t a t e s

D e d u c t — - S h a r e o f E s t a t e D u t y p a y a b l e t o S t a t e s

T O T A L

D i s b u r s e m e n t s

C o l l e c t i o n o f T a x e S j D u t i e B a n d o t h e r P r i n c i p a l

R e v e n u e s

D e b t

S e r v i c t s

A d m i n i s t r a t i v e

S e r v i c e s

S o c i a l a n d D e v e l o p m e n t a l S e r v i c c n .

M u l t i - p u r p o s e R i v e r S c h e m e s e t c . .

P u b l i c W o r k B

e t c .

T r a n s p o r t a n d

C o m m u n i c a t i o n s

• C u r r e n c y a n d M i n t

M i s c e l l a n e o u s

C o n t r i b u t i o n s a n d

M i s c e l l a n e o u s

A d j u s t m e n t s :

G r a n t s t o S t a t e s a n d U n i o n T e r r i t o r y

G o v e r n m e n t s

S t a t e s ' S h a r e o f U n i o n E x c i s e

D u t i e s

O t h e r

E x p e n d i t u r e

E x t r a o r d i n a r y

I t e m s

D e f e n c e

S e r v i c e s ( N e t )

T O T A L

D e f i c i t ( — )

Surplus(+)

Budget

1965-66

419-50*

819-19*

37i'6o

291-50

7-40

13-S0

T-5?

3-io

23-87

296-73

yji

23-57

0-13

3-94

6'7S

61-69

25'47

34'8l

60-50

—121-27

—7-17

2345-87

28-88

356-11

91-36

184-66

1-98

22-98

10-62

16-40

116-27

327-11

140-84

4-69

65-84

74§-74

2116-48

+229-39*

(In crores of rupees)

Revised

1965-66

531-20

861-35

330-00

•>6o-oo

7-oo

14-00

o-75

3-00

24-76

316-46

9"36

24-19

o-12

4-22

8-20

62-55

26-69

35-07

80 72

—123-34

—6-79

2469-51

29-64

372-61

92-21

177-73

1-90

21-77

10-94

17-03

127-36

334*95

145-92

4-82

81-48

769-06

2187-42

+282-09

Budget

1966-67

560-00

+0-52**

969-70 .

-42'27*'t.

340-00

+36-07",

270-00

+24-45** '

+0-70**,

14-00

0-75 \

3-00 \

—1-71 /

26-47;*\

+0-50**/

360-62

9-45

22-56

0- 12

8-45

64-94

19-07

43-34

30-66

—130-45

—7-11 \

—0-69** /

2617-12 \

r-ioi-51**/

30-84

414*83

IIO-OS

195-57

2-03

23-83

10-94

17-82

15^-35

396-30

212-75

5 -ox

37-38

797-67

2407-41

+209-71 \

+ 101-51**/

•

n addition the measures introduced through Finance (No. 2) Act, 19651 were expected to yielsrf

I Rs. 80-33 crores under Customs and Rs. 25-92 crores under union excise duties making

atotfllofRs. 106-25 crorcuj thereby increasing the Revenue Surplus to Rs. 335 -64 crorc*.

• •

Effect of Budget proposals,

•

CT.ITTS

1 - - i n

•

(PAKT I - S E C . I]

T H E G A Z E T T E O¥ INDIA E X T R A O R D I N A R Y

1 1 5

E I N A L

E S T I M A T E S

S T A T E M E N T B

C A P I T A L B U D G E T

Receipt^

R e v e n u e Surplus

P u b l i c D e b t :

Raised in India

Floating Dehi (other than T r e a s u r y Bills;

Raised ah road :

Loans othvrth'jn VI. 480 Loans

P L 430 Loans

Repayment ot Loans and Advances :

Sciles and Union Territories

OtJ.ers

Small Savings ( N e t )

P r o v i d e n t F u n d s (Not)

I n c o m e Rax A n n u i t y Deposits ( N e t )

Deposits of P L 4«r> iMinJs ( N e t )

Spect?.l DevelupiiiLiM F u r d (Net)

Rnilwnyr.nL, P. & T . Funiis (Net)

•Other i ) e b i , D c p . '.us etc, (Net)

T O T A L

D i s b u r s e m e n t s

•Capital E x p e n d i t u r e :

Civil

Defence

Railways

P. & T

R e p a y m e n t of D e b t :

Raised in I n d i a

Raised abroad

L o a n s a n d Advances :

States a n d U n i o n Tcn-itoriei

Others

T O T A L

A d d — N a t i o n a l transfer of loan assistance to t h e

Special D e v e l o p m e n t F u n d

T o t a l D i s b u r s e m e n t s

Overall Deficit (—)

• S u r p l u s + )

(In ctorcs of rupees)

Budget

1965-66

229 39*

270-00

588-86

Ko-oo

Z73'<9

(lO'OO

135-00

54-66

65'00

l Q I ' C O

143-16

48-23

27-25

2166-24

359-73

130-05

240-0

3^-83

170-00

97-29

703-46

349'94

2083-30

Ko-oo

2163-30

-i 2'94

Revised

1965-66

282-09

286-37

53-57

536-90

8o- 00

281-64

6T-00

134't'o

55-05

45-40

150-00

109-74

37-80

48-40

2162-86

37^-37

H9'33

239-89

29-99

173-00

96-44

823-38

393'4⁶

2247-86

80-co

2327-86

—165-00

Budget

1966-67

209 71 A

-lOI-JI**/

284-00

1-21

459'85

325-00

288-00

82'00

135'CO

•iT s8

44'40 V

-9'39*'J

—119-00

349'TZ

26-57

19-48

2160-50

+ 92-12**/

301'93

I20-6O

180-60

24-25

193-60

120-59

665-93

345-00

I952'5O

325-00

2277-50

—117-00 \

+ 92M2**/

•

This would increase to Rs. 335-64 crores at explained under Statement A

** Effect of Budget proposals.