JK unveils Rs 80k cr budget



JAMMU, Jan 11: Tabling his fourth budget in a row, Jammu and Kashmir Finance Minister Haseeb Drabu on Thursday announced the implementation of 7th Pay Comm-ission recommendations from April 15, Dearness Allowance for the State Government employees and other benefits in the interest and welfare of the employees.
He also announced the Govern-ment’s decision of recom-menda-tions for one year to finalise the regular-isation of 61,000 seasonal, casual work-ers working in different parts of the State Government.
Asserting that operations will be the focus of the new budget, the Finance Minister said, ”Government would also provide social security system to commercial contractors as the government has already asked the Jam-mu and Kashmir bank to issue credit ATM cards to these com-mercial contractors”.
He also said zero-based manpower audit would be ensured in the coming financial year and recruitment rules for appointments would be reviewed without abolishing any department.
Mr Drabu also announced the hike in daily wages of skilled workers from Rs 50 to Rs 225 and increasing of wages for highly skilled workers to Rs 400 a day.
Soon after the presentation of the budget in the House, CPI (M) Secretary and MLA Kulgam MY Tarigami sought clarifications from the Government on the non-inclusion of the power development department in the budget which sparked protest and the Speaker adjourned the House for the day.
Other major decisions of the Government in the budget 2018-19 included strict discipline of no re-appropriation after December 31st 2017 has resulted in more than 50 per cent of the outlays being spent by December 31st, 2017, Rs 5 crore each to the Handicraft Development and Handloom Development Corporations for raw material and inventory upgradation, One per cent Dearness Allowance due to the employees from July 1, 2017, unmarried daughters of the employees, who were hitherto not entitled to receive pension, have now been made eligible to receive pension once the employee and his/her spouse is no more, increased Personal Accidental Insurance from Rs 5 lakh to Rs10 lakh, Accredited journalists of the state to be covered under Mediclaim Group Insurance Scheme, abolition of basic toll on all non-commercial, private light motor vehicles.
With a focus on reaping the harvest of the radical fiscal reforms undertaken by the State Government during the past three budgetary exercises, the Minister of Finance, Dr Haseeb A Drabu, today presented his 4thBudget in the State Assembly terming it a major step towards making Jammu and Kashmir a truly welfare state. "It will be a potential game-changer budget full of welfare initiatives," he said.
"The Budget is a culmination of sustained work in building new systems for public expenditure management over the last three years. We have made concerted and coordinated efforts to overhaul the style and substance of financial management of the state with macroeconomic stabilisation complemented by structural reforms and followed by systemic changes. They have now set the stage for meaningful public policy interventions," Dr Drabu said while presenting Rs 80000 crore Budget for the fiscal 2018-19 in the House.
The Finance Minister said J&K is the first state in the country that is presenting the budget in the first half of the last quarter of the current fiscal while the central budget is taking place a month later. "We were the first state to move from the archaic Plan-Non Plan Expenditure to Capital and Revenue Expenditure which was followed by other states. All the systematic changes been made so far have started paying off," he said and added that a new, robust, sustainable and people-friendly financial architecture is taking shape in the State.
Amid thunderous applause from the Treasury benches, the Finance Minister said that it is perhaps for the first time in the budgetary history of J&K that the revised estimates for the current year are much better than the budget estimates presented last year. "Revenue Estimates envisaged to be Rs 9931 crore, have been exceeded and in the process, we have crossed the Rs 10,000 crore mark of own tax collection," he said.
"When I took over as the Finance Minister, there were huge departmental liabilities of more than Rs 11000 crores of which Rs 7,000 crore were of power and Rs 4,000 crore across all departments. Today, the departmental liabilities have come down to just Rs 600 crore or so of works done and power purchase liabilities have been reduced to a little more than Rs 3,000 crore," he said.
The Finance Minister said the State was facing an unfunded resource gap of over Rs 3,000 crore. "As the year comes to an end, I have a surplus of more than Rs 1300 crore. The fiscal deficit which is regarded to be the single most important indicator of fiscal performance, was estimated at around 9.5 per cent but has actually turned out to be around 5.7 per cent; an improvement of nearly 400 basis points. This is unprecedented," he said and added it indicates that systems, which were in a state of disarray, have started stabilizing and functioning in a better way now.
"Because of a well-run financial set up, we are able to take decisions that change lives of the people for good, especially of the most vulnerable and marginalised. We hiked the minimum wages of the working class substantially and a new category of highly skilled worker was introduced and Rs 400 was fixed as the minimum wage," the Finance Minister said.
While announcing a slew of measure for the socially and economically disadvantaged sections of the society, Dr Drabu said the State Government under the leadership of Chief Minister Mehbooba Mufti have woven a social security net around the poorest of the poor, insured their lives, protected them against disability, disease and death, provided for their children's education and given them access to small credit. "I am sure this will make life simpler and more secure for 3 lakh families; that is 15 lakh people," Dr Drabu said.
To revive the traditional handicrafts industry of Kashmir, Dr Drabu said the government is setting aside Rs 5 crore each to the Handicraft Development and Handloom Development Corporations for raw material and inventory upgradation. "This will set them on a path of recovery and from there we will clean their balance sheets and restructure their business operations as is underway in the case of J&K HPMC," he said.
In a major relief for the state employees and pensioners, Dr Drabu said the government will set up a corpus fund of Rs 12,000 crore, which will be used for making timely GPF payments to the Government employees in future. "To express my gratitude to all the employees of the state Government, I am announcing release of 1 per cent Dearness Allowance due to the employees from 1st July, 2017. Our Government is already committed to the implementation of 7th Pay Commission Recommendations from April 1, 2018, which will be effective from 1st January, 2016," he said, adding that the various anomalies in different departments will be addressed during the course of implementation of 7th Pay Revision.
In line with it, being an employee friendly Government, we recently reduced the eligibility for full pension from 28 years of qualifying service to 20 years of qualifying service. This measure alone will benefit more than half of the number of employees on the rolls of the Government, as they were denied full pension for want of qualifying service.
As a major social security initiative for the children who lose their parents, "unmarried daughters" of the employees, who were hitherto not entitled to receive pension, have now been made eligible to receive pension once the employee and his/her spouse is no more. "This is a step towards promoting gender equity as well. Also, the Group Mediclaim Insurance Policy which, unlike in the past covered only gazetted employees, will now also be available to the Government employees including pensioners and accredited journalists. Given the fact that there are 4.5 lakh employees, and about 1.5 lakh pensioners, this insurance cover extends to about 30 lakh people," he said and added that even the BPL families would be now covered under the insurance.
To cater to the rural areas of the State where the government employees are reluctant to get posted, the Finance Minister said such a practice impacted the service delivery. "In order to incentivise transfers and postings in rural areas, Government shall come out with a scheme to incentivise the postings in the remote areas. Besides having rational framework of allowances, it will also have a built-in incentive for postings in the rural areas, while dis-incentivising "deployment" in urban areas," he said.
The Finance Minister said the last few years have been very damaging for business in general. "Be it tourism, manufacturing, or household enterprises, all are in one kind of a distress or the other. First the localised factors; floods of 2014, and then the disturbances of 2016, then came the policy shock of demonetisation which was followed by a major tax regime change, the Goods and Services Tax. The short term disruptive influence has been more pronounced on the SMEs all around the country, more so in J&K," he said.
"Considering the importance of industries for employment generation, I also propose an incentive for SMEs and industrial units to get them listed at SME Exchange and other Stock Exchanges in the country to raise capital through IPOs or other market tools. I make an initial budgetary provision of Rs. 1.00 crore and will provide additional money, if required," he said.
To mitigate the losses suffered during the floods of 2014 and the situation in 2016, Dr Drabu said the RBI approved a loan restructuring package for borrowers in the state. "In deference to our Chief Minister, I have decided to rollout a "CM's Business Interest Relief Scheme". For all the RBI approved restructured accounts, the Government will contribute one third of the total interest payment of all these borrowers. In other words, one third of the monthly instalment will be paid by the state Government and two thirds will be paid by the borrowers," he said and added that it is a conscientious and caring budget reaching out to every section of the society.
Government today unveiled a Rs 80,313 crore budget with multiple sops for farmers and industry while announcing the implementation of 7th pay commission from April, along with 1 per cent DA.
It also introduced a slew of new initiatives and capital infusion in Central Cooperative Banks in the state besides various amnesties.
"Despite being liberal, my budget numbers for the year 2018-19 are looking good. I propose to spend Rs 80,313 crore in the course of the year. Of this, Rs 29,128 crore is going to be the capital spending.
"This is by far the highest capital spend in the economy of J&K," Finance Minister Haseeb Drabu said in the Legislative Assembly.
He proposed to raise about Rs 9,000 crore in the next financial year, Rs 331 crore higher than this year.
Speaking at press conference, Drabu said: "It is balanced budget with aim of restructuring, cleaning up, protecting industries, welfare of employees serving in difficult conditions, addressing youth. It is generally a budget people call it election budget".
Compared to last year, he said, the state will finance an additional capital expenditure of Rs 3,282 crore with an additional borrowing of only Rs 331 crore. "The incremental borrowing to capex ratio is 1:10. This must be the best ratio anywhere in the country."
He said the revenue receipts position is looking even better. The aggregate revenue receipts are estimated to be Rs 64,269 crore compared to Rs 55,307 crore in the current financial year. The state's own tax revenue is estimated to be more than Rs 11,000 crore.
"As a result, I am not leaving any funded gap in the budget this year", Drabu said.
He said that for 2018-19, the state government has decided to launch a Completion Plan for languishing bridges, schools and water supply schemes.
Of the total receipts of Rs 64,269 crore, Revenue Receipts are Rs 51,185 crore, while the Own Tax Revenue is estimated at Rs 11,194 crore, he added.
The share of Central Taxes is up at Rs 12,984 crore as against Rs 11,803 crore in Revised Estimates in 2017-18, he said, adding that the Revenue Deficit Grants are at Rs 12,952 crore as against Rs 11,849 crore in 2017-18.
The Capital Receipts are estimated at Rs 16,044 crore with total expenditure at Rs 80,313 crore.
The Revenue Expenditure (RE) including Security Related Expenditure (SRE) is to touch Rs 51,185 crore and Capital Expenditure (CAPEX) accounts for Rs 29,128 crore of which Rs 5,500 crore for regular capex and Rs 10,423 crore under the Centrally Sponsored Scheme.
Drabu said Rs 8,300 crore is under Prime Ministers Development Programme (TAMEIR), while Rs 1,077 crore is to be devolved to PRIs and ULBs under 14th FC grants.
"Outgo on pension including leave encashment and NPS during the year 2017-18 is at Rs 5,100 crore," he said.
The Finance Minister said that the Gross State Domestic Product (GSDP) at current prices is estimated to be Rs 1,57,384 crore, which would be equivalent to 14.9 per cent growth at current prices over the previous year.
The Tax Revenue and Non-Tax Revenue is estimated at Rs 16,955 crore, higher by Rs 1,430 crore over the revised target of Rs 15,525 crore.
The Tax revenue is expected to grow by 10.43 per cent over the current years RE.
Drabu said: "Reforms have now set the stage for meaningful public policy interventions. I can see green shoots of fiscal order because of the systematic changes made so far.
"Fiscal deficit previously estimated at around 9.5 per cent has actually turned out to be around 5.7 per cent."
For government Employees, the government announced grant of 1 per cent Dearness Allowance for employees from 1st July 2017, and Committed to implement 7th Pay Commission Recommendations from April 1, 2018, which will be effective from January 1, 2016.
Drabu said the unmarried daughters of the employees, who were not entitled to receive pension, have now been made eligible once the employee and his or her spouse is no more.
The budget enhanced the Deposit Linked Insurance of GP Fund subscribers from Rs 10 lakh to Rs 50 lakh. Similar scheme will be framed for the employees covered under NPS.
The minister said that all the government employees including pensioners, along with 5 family members, will be covered under improved and enhanced Group Mediclaim Insurance Policy.
Given the fact that there are 4.5 lakh employees, and about 1.5 lakh pensioners, this insurance cover extends to about 30 lakh people, he added.
The government has increased the Personal Accidental Insurance from Rs 5 lakh to Rs 10 lakhs and "Assured Career Progression Scheme" for all the Gazetted cadres of engineering departments, Drabu said.
For businesses, industries and traders, the government will consider providing alternate incentive in lieu of CST to the industrial units in the State, he added.
However, Chief Minister, Mehbooba Mufti has welcomed the Budget 2018-19 presented in both Houses of State Legislature today, terming it as development focussed and people oriented.
The Chief Minister said the highest ever capital outlay in this budget is the proof of her Governments developmental premise. She said based on the feedback from her public outreach programmes, Rs. 200 crore have been earmarked for drinking water supply in the State besides Rs. 50 crore for completing around 1000 ongoing schemes. This, she said, depicts the developmental intervention this Government has thought of for changing the socio economic profile of the State.
Mehbooba Mufti said the budget, by focussing on panchayats, has fully displayed the commitment of her Government to strengthen local self government in the State at political, administrative and financial levels.

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