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Drabu rains `amnesties’, ‘sops’ in Rs 80313 Cr J&K budget for 2018-19

Shuchismita. Dated: 1/12/2018 11:07:47 AM

7th Pay Commission recommendations to be implemented from Apr 1, 2018; 1 pc DA from Jul 1, 2017

JAMMU, Jan 11: Allowing his `populist politician’ persona prevailing over ‘a celebrated economist’ on the insistence of the Chief Minister, as per his own candid ‘poetic’ admission, the Finance Minister Dr Haseeb Drabu Thursday presented Rs 80,313 Cr zero-deficit, ‘tailor-made’ for an election year budget for J&K for the fiscal 2018-19.
The budget, his fourth in a row, was, not surprisingly, quite high in populism content in the wake of ensuing Panchayat elections. ‘Election flavour’ was visible as amnesties, waivers rained for industry, trade and other economically crucial sectors `in distress’ besides slew of welfare measures for employees. Another significant aspect related to `Panchayat poll fever’ was the presentation of separate Panchayat budget for the first time, at the cost of separate Power budget.
Wooing around 6 lakh government employees and the pensioners, Drabu announced the implementation of 7th Pay Commission recommendations from April 1, 2018, which would be effective from January 1, 2016. He also announced release of 1 percent Dearness Allowance due to the employees from July 1, 2017.
Coming to statistics and a quick glance at the total receipts (projected for the Year 2018-19) reveals status quo vis-a-vis state government’s continued reliance on central grants, which constituted 43 percent of total receipts.
Rest of the break-up of total receipts includes 20 percent borrowings, 16 percent share of Central taxes, 14 percent own taxes and 7 percent under the head “own Non-tax.”
Out of total receipts, 36 percent will be capital expenditure, 30 percent and 6 percent will be spent on salaries, pension bills of the army of state government emplo1yees respectively. 6 percent will be spent on interest payment, 9 percent on power purchase and 13 percent on other expenditures.
Finance Minister said that it was 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,” Drabu said.
“When I took over as the Finance Minister, there were huge departmental liabilities of more than Rs 11000 Cr of which Rs 7,000 Cr were of power and Rs 4,000 Cr across all departments. Today, the departmental liabilities have come down to just Rs 600 Cr or so of works done and power purchase liabilities have been reduced to a little more than Rs 3,000 Cr,” he said.
Of the total receipts Rs 64,269 Cr, Revenue Receipts are Rs 51,185 Cr and Own Tax Revenue is estimated at Rs 11,194 Cr, he added.
The share of Central Taxes is up at Rs 12,984 Cr as against Rs 11,803 Cr in Revised Estimates 2017-18, he said, adding that the Revenue Deficit Grants of Rs 12,952 Cr as against Rs 11849 Cr in 2017-18.
The Capital Receipts are estimated at Rs 16,044 Cr with total expenditure at Rs 80,313 Cr.
The Revenue Expenditure (RE) including Security Related Expenditure (SRE) is to touch Rs 51,185 Cr and Capital Expenditure (CAPEX) accounts for Rs 29,128 Cr of which Rs 5,500 Cr for regular capex and Rs 10,423 Cr under the Centrally Sponsored Scheme.
Drabu said Rs 8,300 Cr is under Prime Ministers Development Programme (TAMEIR), while Rs 1,077 Cr to be devolved to PRIs and ULBs under 14th FC grants.
“Outgo on pension including leave encashment and NPS during the year 2017-18 at Rs 5,100 Cr," he said.
The Finance Minister said that the Gross State Domestic Product (GSDP) at current prices is estimated to be Rs 1,57,384 Cr, 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 Cr higher by Rs 1430 Cr over the revised target of Rs 15525 Cr, he added. The Tax revenue expected to grow by around 10.43 per cent over the current years RE, he added.
"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,” he said.
The Finance Minister said the State was facing an unfunded resource gap of over Rs 3,000 Cr. “As the year comes to an end, I have a surplus of more than Rs 1300 Cr. 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, started stabilizing and functioning in a better way now.
The Finance Minister said J&K was 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.
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 Cr 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 Cr, which will be used for making timely GPF payments to the Government employees in future.
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, were 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,” Drabu said and added that even the BPL families would be now covered under the insurance.
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.