Drabu’s Bag Unveils Rs 79,472 Cr Development Oriented Budget
|‘Proposals aimed at improving operational efficiency of Govt’ |
TNN Bureau. Updated: 1/12/2017 1:54:42 AM
JAMMU: Finance Minister Haseeb Drabu today presented Rs 79,472 crore deficit budget laying emphasis on pro-employees welfare initiatives, including the implementation of 7th Pay Commission from April next year.
In his Budget speech in the Assembly Drabu said the focus will be on timely rollout of projects under PMDP to the tune of Rs 80,000 crore for development and reconstruction of physical and economic infrastructure.
Various initiatives were also announced including insurance to government properties, crops, heritage properties and various types of financial aid for workforce in different sectors.
Chief Minister Mehbooba Mufti has welcomed the 2017-18 Budget presented in both Houses of State Legislature today.
She said many of the social interventions, including relief to horticulture, agriculture, transport and allied sectors, have been aimed to address some of the chronic issues which have assumed huge social magnitude in the state.
Rs 31,000 crore dev, Rs 49,000 crore
"During 2017-18, the state government intends to spend almost Rs 79,472 crore. Of this, developmental expenditure would be about Rs 31,000 crore and current expenditure would be almost Rs 49,000 crore," Drabu said.
"This level of expenditure will be financed through non debt creating receipts of Rs 58,000 crore and about Rs 18,000 crore of borrowings," he said.
"Given the composition of our revenues, we have a surplus of more than Rs 9,300 crore. Yet, here will be a resource gap of Rs 3,137 crore for which ways and means have to be found during the course of the year," he said.
While the total receipts are to the tune of Rs 76,335 crore, the total expenditure is to the tune of Rs 79,472 crore resulting in deficit of Rs 3,135 crore, he said. He said in the new scheme of federal finance, centrally sponsored schemes account for a major part of the capital expenditure budget.
"Significant resources are also committed towards meeting the required state share for accessing central funds under the CSS and for putting in counterpart share for World Bank/ADB funded projects and now the Prime Minister's Development Package (PMDP)," he said. The package caters to the need to strengthen the economic and social infrastructure and provide for balanced development of the three regions of Jammu and Kashmir, he added. "The major focus in the infrastructure sector will be on physical connectivity through upgradation of road network. All unconnected roads and hamlets will be covered through different projects," he added.
Receipts, expenditure downward
Given the prevailing situation, both receipts as well as expenditure have had to be revised downwards, he said adding that the total revenue receipts of the state for the current financial year are revised to Rs 57,522 crore, lower than the budgeted estimates by Rs 4,159 crore.
This shortfall is mainly on account of lower collection of state's own tax revenue and a reduced level of borrowings.
Tax revenue is expected to register a shortfall of Rs 778 crore. He said the non tax revenue shows an increase of about Rs 1,200 crore because the Revenue Expenditure (RE) includes contra credit of Rs 1,400 crore on account of power subsidy and otherwise, non tax revenues have done equally badly. "Likewise, RE is about Rs 2,400 crore less than what we had budgeted for and Capital Expenditure is more or less at the budgeted level. As a result, the resource gap has increased by about Rs 1,000 crore," he said. "Indeed, in the course of this year we have cleared liabilities of Rs 5,000 crore and hope to clear Rs 3,000 crore more," he added. The minister said the 7th Pay Commission for government employees will be implemented in cash from April 1, 2018.
"Insurance cover be provided to serving employees of all categories in government for a period of five years. Further, it be made optional for pensioners up to a cover of Rs 6 lakh for full family unit," he said.
"The principle focus of this budget is to build system processes so that we can spend this money efficiently, usefully for the entire state and showcase a certain degree of progress and that is the key theme of the budget," he told reporters here.
Taking the state towards modern public management system, he said, "Drawing from the International Monetary Fund's classification reforms spelt out in its Government Finance Statistics Manual, I intend to give the budget structure a developmental rather than a purely administrative orientation."
He said he proposed to reorganise the 29 departmental demands for grants into four major sectoral categories: Administrative, Infrastructure Development, Social Sector and Economic Development.
"Changing the format of budget documentation and reporting is an important aspect of the budget reform process and of implementing a new framework for public financial management. I want to give it a legislative backing," he said.
The new legislative framework for public financial management will shift the onus of managing the use of resources from central control to the managers of spending departments and agencies, he said.
"We will put in place Budget Estimation, Allocation and Monitoring System (BEAMS), online computerized system to distribute the budget and to authorize expenditure," he said adding that Treasury System be replaced by a functionally aligned Pay and Accounts Office (PAO) System.
"Budget control mechanism of audit and invoice checking will be strengthened at the department level," he said adding that Integrated Financial Management System (IFMS) will also come into force for online bill processing.
In bid to use working season more, the minister said the Finance Department and the Planning, Development and Monitoring Department will release 50 per cent of the revenue and Capex budget by February 10, authorising expenditure to be made from April 1.
"The administrative departments/HODs/executing agencies should complete procurement and tendering process by May," he said.
"I'm deeply pained to inform the House that in J&K Bank, there have been some serious lapses in corporate governance and management failures over the last few years. As a promoter of the bank, we did make some efforts in the last two years to sort out the issues of asset quality without impairing the autonomy of the bank," he said.
"With a change in the top management and the board, the reality has now surfaced. The bank has declared NPAs of Rs 6,000 crore. There is also a significant under-provisioning of impaired assets," he added.
The minister said as a result the bank has had to declare a loss of Rs 600 crore for the quarter ended September 2016-17.
"To help the bank, I'm making an equity infusion of Rs 532 crore in two tranches. This will help in not only maintaining the required capital adequacy but also in financing new asset growth," he said.
The Minister said there was governance failure and management failure and a new management has been put in place.
"I'm happy to report that we completed the formalities for incorporating the J&K Asset Reconstruction Company in partnership with the J&K Bank. The state government is a majority shareholder while the bank holds 49 per cent," he said.
"There are still some issues to be resolved with regard to CGST and IGST for all states", he said.
"As for J&K, the proposed GST law is not applicable to J&K. We will have to work out in what form it can be applied...Central excise and central sales tax, which will be replaced by the CGST and IGST respectively, already are applicable but only to goods and not services. As regards SGST we will formulate our own law and bring it to the legislature", he said.
The Minister said till such time, government proposes exemption on commodities like paddy, rice, wheat, pulses, flour. VAT remission to the local industry is proposed.
"J-K SPDC will become a debt-free company with an equity base of Rs 3,000 crore," he said adding that equity infusion of Rs 532 crore to J&K Bank in two tranches will aim at capital adequacy and growth financing as it has suffered from huge NPA.
"J&K Asset Reconstruction Company in partnership with the J&K Bank will set up. The state government is a majority shareholder in this, while J&K bank holds 49 per cent," he said.
To ensure safety mechanism in view of the turmoil and natural calamities, he said comprehensive insurance scheme for nine crops--paddy, wheat, maize, apple, mango, saffron, pulses and oil seeds--against damages will be given against most natural disasters including hail, floods, draught etc.
"Sectors for insurance will include public assets and government vehicles, cultural assets like artefacts, rare manuscripts, paintings", he said.
Social security net for welfare of working class, for construction and other workers, cash credit facility up to Rs 10,000, accidental insurance cover of Rs 2 lakh, life insurance cover of Rs 2 lakh, health insurance cover of Rs 30,000, with premiums will be paid by the Board on behalf of the workers, he added.
He proposed audit at all levels for manpower rationalization and revision of all recruitment rules within one financial year to synchronise job requirements with commensurate educational requirement.
Other initiatives include convergence of all student scholarship schemes, delinking of disbursement of salary from the source of funding of salary, regularisation on contractual basis of all those who have given their land to state government, change of nomenclature of government employees at lower levels, change of class categorisation among others.
He said government has proposed to set up a zoo each in Kashmir and Jammu, creation of e-commerce platform to link 20,000 artisans and weavers, 50 per cent interest subvention for setting up of modern walnut processing units, provision of Rs 5 crore to establish CFC at Lassipora, 50 per cent interest subvention in bank loans to new tannery units.
Government also proposes to set up 'Airwaan-e-Sahaafat', a Kashmir press centre, 'All Terrain Mountain Bike' scheme for boys with a provision of Rs 3 crore, a football league and allocation of Rs 2 crore, and 'Shamas Faqeer Institute of Sufi and Folk music' with an initial provision of Rs 5 crore.
‘No focus on job creation, private sector growth’
Directionless, lacking says Oppn
JAMMU/ SRINAGAR: The Opposition slammed the budget as directionless and completely lacking in any provisions to address the main issues of unemployment and growth of private sector in the state.
Expressing dismay over the budget, National Conference General Secretary Ali Muhammad Sagar said, "Unemployment is the biggest issue and there is nothing in the budget to tackle the problem. There is urgent need to address unemployment that is going up day by day." Sagar said that there is nothing for horticulture and agricultural sectors in budget. "Let us see what happens in April 2018, when the 7th pay commission is implemented," he said adding that regularisation of daily wagers with conditions is also disappointing.
"Today's budget did not bring any relief to the people," he said.
Congress Legislature Party leader Nawang Rigzin Jora said that the budget does not offer any direction to the economic policy and has completely failed to address the issues of unemployment and employees.
“The whole development rant of the Finance Minister is mainly driven by public spending. The budget doesn’t say anything about private investment,” said Jora.
“Economic growth without job creation is a joyless growth. Besides Pakistan’s mischief, the main reason for turmoil in Kashmir is unemployment but the government has failed to tackle that problem,” Jora said.
He also criticised the government for deferring implementation of seventh pay commission to next year.
Senior CPI (M) leader and MLA Kulgam Mohammad Yousuf Tarigami said that the budget has no mechanism to tackle the alarming rise of unemployment in the state. The unemployed youth will feel let down. It shows that employment generation is not a priority of this government. It has no measures to provide succour to the financially vulnerable sections. The separate power budget has no future policy to augment generation, transmission and distribution and lacks framework for revival of state’s economy, he said. Tarigami said that core sectors like agriculture, horticulture and livestock have been completely neglected and there is no direction in the document to make agriculture a profitable sector. It is also disappointing for the entrepreneurs and lacks focus on revival of the industrial sector.
Former Finance Minister in PDP-BJP dispensation, Pawan Gupta said that the budget was Kashmir-Centric and there was nothing for Jammu region.
“There was nothing progressive in the state budget. Expenditures are on rise perpetually and no efforts are being made to control the same. In the last two years, J&K Bank’s assets worth Rs 6000 crore were emptied. And the same prompted the Finance Minister to come with an equity infusion of Rs 532 crore for the bank. What was the Finance Minister doing for the last two years?”
On 50 per cent interest subvention for setting up of modern walnut processing units, he said, “Just to save the walnuts of Kashmir, this government imposed tax on the import of walnuts from other states which is highly objectionable.”
“It is anti-people, anti-Jammu, anti-trade and anti-industrial sector budget,” he added.
Trade, industry bodies welcome FM proposals
BIVEK MATHUR/ SHABIR AHMED/ NEERAJ SHARMA
JAMMU: The trade and industry welcomedthe proposals in the budget and hailed Finance Minister Dr Haseeb A. Drabu. President, Jammu Chamber of Commerce and Industries, Rakesh Gupta was all praise for Dr Drabu for accepting most demands put forth by industrial and trade bodies in pre-budget discussions.
“I appreciate Dr Drabu highly on move of making the State Excise Toll Post and Commercial Taxes Check Post at Lakhanpur functional 24*7. I also welcome amnesty scheme for the dealers registered under J&K VAT Act 2005 for waiver of interest and penalty till accounting year 2015-16 on the line given to dealers registered under GST Act 1962,” ,” he said.
“I have not read the document fully but I think the budget is trade and industry-friendly,” he added.
Mushtaq Wani, President Kashmir Chamber of Commerce and Industries, also welcomed the budget announcements.
He said that steps like equity infusion of Rs. 532 crores into J&K Bank in two tranches for capital adequacy and growth financing, making J&K SPDC a debt-free company with equity base of Rs. 3,000 crore, 50% interest subvention for setting up of modern walnut processing units, including apple, saffron, paddy and oil seeds among nine crops for comprehensive insurance scheme against damages from natural disasters and GST type amnesty scheme, are highly appreciable.
He however regretted that the long-pending demand to bring Artisan Credit Card Scheme at par with Kisan Credit Card Scheme has been ignored which is causing liquidity crunch for the artisans who are contributing to the export business of the state.
He also said that the budget ignored tourism, handicraft and horticulture sectors.
“The tourism sector has suffered a lot due to unrest. In pre-budget deliberations we demanded incentives for the Handicraft sector so that the sick units could be revived but nothing was announced,” he added.
Former President Jammu Chamber, Y.V. Sharma said, “I welcome the Finance Minister announcing major incentives for the revival of sick units. The 50 per cent interest subvention for setting up modern walnut processing units with facility of cold stores, measures for revival of silk factory, woollen mills, I welcome the announcements.”
Sheikh Ashiq, former Kashmir Chamber of Commerce and Industries president appreciated equity infusion of Rs. 532 crore into J&K Bank, empowering JKSPDC, among other schemes.
“I appreciate that most of our demands have been addressed,” he said.
He appealed government to make provision for announcing special budget for the promotion of walnuts produced through organic farming in Kashmir valley.
“How would our top quality walnut produced through the organic farming get adequate representation in international markets if government does not promote it?” he said.
Lalit Mahajan, President Bari Brahamana Industries Association, said that the budget is industry-friendly but some suggestions put forth during pre-budget discussions have been ignored.
“We requested an amnesty scheme at par with domestic power amnesty scheme be announced for industrial units having dispute of power bills. But nothing was announced,” he said.
Finance Minister was requested for removal of edible oil from the negative list but it was not done.
Appreciating the Finance Minister for presenting a good budget, Annil Suri, a prominent businessman, said, “Overall it is very good. All the pre-budget suggestions were given adequate representation.”
According to him, dealers registered under Jammu and Kashmir VAT Act, 2005 had demanded amnesty at par with the amnesty granted under J&K GST Act, 1962, enabling them to settle their issues of VAT before migration to the new tax regime.
“The same (Amnesty) has been granted to the dealers registered under J&K VAT Act 2005 for waiver of interest and penalty till accounting year 2015-16 on the line given to dealers registered under GST Act 1962. It is definitely a welcome move,” Suri said.
He said, “The government is carrying forward the rationalization of negative list by deleting manufacturing and industrial activities.”
The Valley traders termed it a “political budget” and said the FM ignored trade community.
"The only thing that is appreciable is interest subvention scheme for transporters. Else, there is nothing for the trade community," said Kashmir Economic Alliance (KEA) president, Muhammad Yasin Khan.
Khan said not even a single demand put up in pre-budget talks has been fulfilled.
Kashmir Chamber of Commerce and Industries (KCC&I) president, Mushtaq Ahmad Wani, said, “Most demands of trade community have been ignored while some things are appreciable.”
Kashmir Traders Manufacturing Federation (KTMF) president, Basher Ahmad Rather termed the Budget as ‘old wine in new bottle’.
“The FM announced interest subvention scheme for transporters but that is not new as it was already announced by the government in SRO,” he said.
Meanwhile, the employees unions hailed the Budget. Civil Secretariat Employees Coordination Committee (CCECC) hailed the pro-employees measures.
CCECC leaders Ghulam Rasool Mir and Mohammad Maqbool Hussain welcomed the announcement regarding implementation of 7th Pay Commission Recommendations with cash-payout from April 2018.
They also hailed the announcement regarding regularization of daily-rated workers and bringing all employees under the ambit of Mediclaim Insurance Scheme.
Sanjeev General Secretary All Jammu Province Casual Need Based Workers Union PDD said that the government has considered long pending demand of casual employees.
Gafoor Dar, Convener, J&K Government Employees, Casual Labours, workers and Pensioners United Platform said that the government should also consider the demand to increase the wages of casual employees.
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