Tuesday, March 7, 2000,
Chandigarh, India


M A I N   N E W S

Mild tax dose in J&K Budget
Tribune News Service

JAMMU, March 6 — Describing the next financial year as the year of recoveries of revenue both tax and non-tax, the Finance Minister, Mr Abdul Rahim Rather, today announced several measures for generating additional resources to decrease the deficit of Rs 2062 crore in the Budget proposals of Rs 7122.35 crore.

Mr Rather in the Budget proposals, which he presented in the State Assembly here today, levied a mild dose of tax to generate Rs 30 crore. He was cheered by members when he announced that the hike in electricity tariff due from April next would be deferred.

The Finance Minister proposed an annual plan of Rs 2525 crore for 2000-2001 against Rs 1750 crore last year. He said the annual plan was yet to be finalised with the Centre. Financial assistance from the Centre was essential for realising the plan.

The Budget proposals suggest liquor (IMFL) and beer will cost more in the State, including in the defence canteen service depots. Mr Rather has proposed an increase of Rs 10 per LPL on CSD sales IMFL and beer Rs 5 per LPL for civilians. These measures have been envisaged to generate additional Rs 10 crore.

Ad-valorem toll on cigarettes and tobacco at the rate of 4 per cent of purchase value has been proposed expected to yield Rs 5 crore per annum. He has also proposed entry tax on goods for personal use, increase in stamp duty and fee.

Mr Rather hinted at strict measures for recovery of tax arrears. In this connection be announced setting up of a sales tax appellate tribunal which would decided the cases speedily and a senior judicial officer having at least 10 years experience would head the tribunal. He announced a self-assessment scheme for dealers who have an annual taxable income up to Rs 10 lakh. Provision of deduction of tax at source will be made more stringent. A vigorous campaign was to be launched against unregistered electricity consumers and against transmission and distribution losses.

As part of economy drive the Budget proposes to downsize the establishment, pruning of top heavy administration, economising use of vehicles by government functionaries and imposing ban on purchase of furniture and furnishings for different departments. Mr Rather told newsmen later new items could be purchased when it was very essential and that too would require approval from the Finance Department.

The Finance Minister referred to Centre’s assurance that it would release additional amount of Rs 300 crore for the current year in case it signed a memorandum of understanding (MoU) with the Centre. He said that the MoU has been submitted to the Centre, but there has been no flow of funds yet from Delhi. Under the MoU the State Government has agreed to take measure for reducing distribution and transmission losses in electricity and to explore the possibility of involving private agencies in the distribution of power and collection of power tariff. It has also been agreed to reform the public sector undertakings, including the State Roadways Transport Corporation so that budgetary support to these corporations was reduced on tapering basis at the rate of 10 per cent per year. Vacancies in these corporations will be frozen except in technical field. The LTC concession to the State Government employees has been withdrawn till the financial position improved.

Under the MoU the state has agreed to encourage voluntary retirement of the employees, stopping appointment of substitutes against leave vacancies, increase of tax revenue by 10 per cent each year over the base of Rs 627 crore.

The Finance Minister, in his budget speech, painted a grim picture of the fiscal health of the State on account of poor recovery of tax arrears and owing to continued increase on expenses related to security. He said despite commitments from the Centre the security related expenses had not been reimbursed. He said over Rs 774 crore were in arrears as far as security related expenses were concerned. This included Rs 230 crore which the Centre had agreed to reimburse. He said the yawning gap between the security related expenses and the funds made available by the Centre has forced the State Government to bank on overdraft from the banks.

He said that the Centre had not so far agreed to the state’s request to treat with retrospective effect the 90 per cent of Central funds as aid and 10 per cent as grant from 1969. He said had this been accepted the state would have been spared of spending Rs 600 crore annually on the servicing of Rs 1275 crore Central loan. He was a bit upset over the fact that the state had not received special treatment from the Centre. He said the Centre had waived Rs 8,000 crore loan in the case of Punjab and sanctioned a Rs 10,000 crore package for the North East, but had not agreed to waive Rs 1275 crore Central loan in case of Jammu and Kashmir.

Mr Rather referred to the Indus Water Treaty of 1960 said that this treaty with Pakistan had imposed severe losses on Jammu and Kashmir because the state was barred from using water from the Chenab, Jhelum and the Indus for power generation. He said despite repeated requests the Centre had not agreed to compensate these losses by making Jammu and Kashmir a participatory state in sharing power generated from the Satluj, Beas and the Ravi, by increasing the free power quota from Central power projects in the state. It has also requested the Centre to compensate the state Rs 6,000 crore per annum loss it suffers owing to the Indus Water Treaty.

He also hinted at the revaluation of Government land under illegal occupation and said that after fixing its market value the land would be given to even non-state subjects on a long lease. The State subjects could become owners of this land provided they pay the real value.

In the budget proposals social services gets the maximum allocation of Rs 700 crore followed by power generation and agriculture.

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