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No drought surcharge on anvil, says govt

The government on Tuesday ruled out any drought surcharge on tax for funding relief operations saying the situation did not warrant such a step in view of buoyant revenue collections and substantial Rs 15,000 crore (Rs 150 billion) available for rural development programmes.

"There is no proposal for drought surcharge on either direct or indirect taxes," a top finance ministry official said adding there was no need to raise additional resources for relief works.

The official said to mitigate drought situation, the government needs to provide employment and food to the affected people.

The allocation in the budget this year for prime minister's 'Sampurna Gramin Yojana', food for work programme and various other programmes worked out to over Rs 13,000 crore (Rs 130 billion). Also Rs 1,600 crore (Rs 16 billion) was available under the Calamity Relief Fund.

All these allocations would be helpful in providing necessary relief to affected people, the official said adding if any contingency arose, money apportioned for other expenditure could always be diverted for drought relief.

The revenue collection so far this year has been comfortable with an average growth rate of nearly 20 per cent, the official said adding the government borrowings this year have not exceeded the target.

On the contrary, it has been less than the projected figures so far this year unlike in the corresponding period last year when borrowings had far exceeded the target, the official said.

The government has mopped up Rs 81,000 crore (Rs 810 billion) till last week, which is 57 per cent of the budget target of Rs 1,42,867 crore (Rs 1,428.67 billion) for the entire fiscal.

Last year, the government had borrowed, during the corresponding period, Rs 78,250 crore (Rs 782.50 billion) which was 67 per cent of the targeted borrowing for the entire fiscal.

The revenue collections were not all that comfortable and were Rs 39,000 crore (Rs 390 billion) less than the target for 2001-02 and this was partially responsible for government borrowings far exceeding the target.

Regarding growth projections, the official said Reserve Bank has already indicated that there could be a downward revision of its 6-6.5 per cent GDP growth projected in April last in the face of the drought.

Asked if the drought would have any negative impact on revenue collections, he said a clear picture would emerge only after Septemper. So far there is no indication to the effect that it had affected revenue collections, which has remained buoyant so far.

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