Govt rolls out populist Budget

TOTAL RECEIPTS: Rs 64,269 cr

REVENUE RECEIPTS: Rs 51,185 cr

OWN TAX REVENUE: Rs 11,194 cr

SHARE OF CENTRAL TAXES: Rs 12,984 cr

REVENUE DEFICIT GRANTS: Rs 12,952 cr

CAPITAL RECEIPTS: Rs 16,044 cr

TOTAL EXPENDITURE: Rs 80,313 cr

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Sumit Hakhoo &Arteev Sharma

Tribune News Service

Jammu, January 11

In its first post-GST Budget, the PDP-BJP government today focused on populism and rolled out several welfare measures “to change the lives of people, especially of the most vulnerable and marginalised”.

Finance Minister Haseeb Drabu, while presenting his fourth Budget in the Mehbooba Mufti-led government, termed it a ‘Budget of conscience’ and ‘potential game-changer’ in the direction of building new systems for public expenditure management. Drabu said the Budget was aimed at giving the benefits of ‘successful sustained structural reforms of past three years’ to the people of J&K.

Unlike the past three Budgets, which focused on fiscal reforms, Drabu, in his 90-minute speech in the Legislative Assembly, said the government had proposed to spend Rs 80,213 crore in the next fiscal year.

“Nearly Rs 29,128 crore is going to be capital spending, so far the highest capital spending in the economy of J&K,” he claimed.

Wooing industrialists and traders, who were demanding debt relief due to losses suffered in the 2014 floods and the 2016 unrest, the Finance Minister announced the rollout of the CM’s Business Interest Relief Scheme for all RBI-approved restructured accounts.

“This scheme will be operative for two calendar years starting January 1, 2018, to December 31, 2020, with an initial provision of Rs 200 crore for the purpose. The government will contribute one third of the total interest payment of all borrowers,” he said.

The minister said the government had made a commitment to mitigate the loss of competitiveness of the industries as a result of the GST implementation in the state.

“The government will consider providing suitable incentive in lieu of CST exemption to the industrial units in the state and the state will provide freight subsidy to the industrial units located in J&K and transporting their manufactured goods beyond 1,000 km outside the state,” he said.

“The government has decided to waive interest and penalty on all power arrears owed to it by the industrialists, hoteliers and tourist resort owners,” he said.

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.

The FMannounced the release of 1 per cent DA allowance due to the employees from July 1, 2017, and implementation of the 7th Pay Commission recommendations from April 1, 2018, to be made effective from January 1, 2016.

“The government has also decided to reduce the eligibility for full pension from 28 years of qualifying service to 20 years of qualifying service while the unmarried daughters of government employees will now be entitled to receive pension in case of death of an employee,” Drabu said.

“This is a step towards promoting gender equity as well. The government is launching an improved and enhanced Group Mediclaim Insurance Policy and has increased the personal accidental insurance from Rs 5 lakh to Rs 10 lakh.”

He also announced an Assured Career Progression Scheme for all gazetted cadres of the engineering departments.

Drabu said the government would soon frame a uniform employment code for the state containing all labour laws in force till now. The government has woven a social security net around the poorest of the poor and insured their lives and provided them access to small credit

“The proposed code will set the framework for terms of employment and service of all workers except domestic workers and agricultural labour and a strong, independent and separate labour judiciary,” he said, adding, “Under the Amnesty Scheme for the transport sector, I am waiving interest and penalty on past arrears of token and passenger tax from July 1, 2016, to March 31, 2017.”

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"The highest-ever capital outlay in the Budget is the proof of my government’s developmental promise. Based on the feedback from my public-outreach programmes, Rs 200 crore has been earmarked for drinking water supply in the state, besides Rs 50 crore for 1,000 ongoing schemes. " – Mehbooba Mufti, chief minister

"The fiscal deficit, which is regarded as the most important indicator of fiscal performance, was estimated at 9.5% but has actually turned out to be around 5.7%. An improvement of nearly 400 basis points is unprecedented." — – Haseeb Drabu, finance minister

"We were hopeful of abolition of toll on goods but the Finance Minister has abolished it only on a few items and has increased the rate on other items from Rs 80 per quintal to Rs 100 per quintal. This will gradually increase the prices of essentials in the state." — –Neeraj Anand, president, chamber of traders’ federation

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Tax collection crosses Rs 10k cr

Crediting the PDP-BJP coalition government with successful fiscal management, Finance Minister Haseeb Drabu revealed that for the first time in the budgetary history of J&K, the revised estimates for the current year were much better than the Budget estimates. The Finance Minister said: “Tax revenues were estimated to be Rs 9,931 crore but we have crossed the Rs 10,000-crore mark of own tax collection. It was estimated that an unfunded resource gap was over Rs 3,000 crore. As the year comes to an end, the state has a surplus of more than Rs 1,300 crore.” “The fiscal deficit, which is regarded as the most important indicator of fiscal performance, was estimated at 9.5 per cent but has actually turned out to be around 5.7 per cent. An improvement of nearly 400 basis points is unprecedented,” he said.

Incentive for staff in rural areas 

The state government will introduce an incentive scheme for employees who volunteer to work in rural areas of the state. The move will be aimed at streamlining the administrative functioning in far-flung areas. The Finance Minister, Haseeb Drabu, said the government wants to ‘incentivise transfers and postings in rural areas” and the department will notify the scheme before March 31. “Every government employee today seeks a posting in the twin cities of Jammu and Srinagar. Sadly, nobody wants to serve in the remote areas of the state. This has impacted the service delivery adversely in remote areas,” said the Finance Minister. Over the next two years, around Rs 500 crore is expected to be invested for the creation of new housing facilities for the government employees.

Power liabilities see a dip 

Although the Jammu and Kashmir Government has done away with the annual exercise of presenting a separate power Budget, Finance Minister Haseeb Drabu presented a rosy picture of the government’s ability to lower the liabilities in the sector. “We were burdened with a liability of Rs 11,000 crore of which Rs 7,000 crore was of the power department alone. These have been successfully managed. The departmental liabilities have come down to just Rs 600 crore and the power purchase liabilities have reduced to a little more than Rs 3,000 crore,” the Finance Minister said in the Legislative Assembly. Accepting that all is not well in the power sector, Drabu said the liabilities were covered by power bonds to defray power liabilities.