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2017-18 Budget

Finance Minister Haseeb Drabu has presented the annual budget for the financial year 2017-18 in the ongoing session of the Legislative Assembly.
A close view of the budget reveals that in the background of limited resources of the State and increased liabilities, the Finance Minister has tried to work out a balance budget so that a tax payer is not burdened substantially nor is prompted to expect more than reasonable incentives. Government would have almost Rs 80,000 crores to spend in the year 2017-18. Of this, Rs 31,000 crores would be spent on development while current expenditure will be to the tune of Rs 49,000 crore. A few reforms have been suggested by the Finance Minister and these could be called the hallmark of the new budget. Dispassionate reflection on these reforms suggests that these would certainly contribute to the financial health of the State. For example, the system of dragging on payments to the month of March each year and then spending 85 per cent of the budget in one month will be discarded and now 85 per cent allocations will be spent before the month of March. Finance Minister has announced that 50 per cent of allocations would be released before February 10. A major complaint of developmental agencies has been that funds are not released in time resulting not only in delay in the completion of projects but also in cost escalation. The new scheme of releasing fifty per cent of allocations will be a remedial measure for this drawback. An important announcement made by the Finance Minister is that of initiating a process of regularizing the services of daily wages, temporary employees or skilled labourers etc. who account for nearly 61,000 persons. These temporary employees/ daily wagers are working in various departments and have not been regularized for last 10 to 20 years. Finance Minister’s commitment will greatly assuage there disturbed feelings and they will find a ray of hope. It has to be remembered that recurring strikes and shut down by these workers, actually a large manpower with organizations like PDD or PHE etc. often lead to much discomfort to the public.  Another major issue is about the case of SSA and RMSA teachers, NHM employees etc, who were not getting salaries for months together. FM has made the commitment that they would get their regular payments as their salary has been delinked from the Central funding. Another important reform is that the Government Treasuries will be closed and instead Pay and Accounts Office (PAO) System will be introduced from October 1, 2017. Digitalization would be a step towards introducing good governance. Likewise revisiting rules governing recruitment to Government vacancies would remove some archaic and obsolete practices that hinder speedy recruitment and increases the output. For the Government employees the news is that the recommendations of the 7th Pay Commission will be implemented from April 1, 2018 and arrears would also be paid subsequently. Though this is a long wait of more than a year yet Government employees have been able to elicit commitment from the Finance Minister.
There are also other fringe easements announced by the Finance Minister in the case of agriculturist, horticulturists and other working classes. These measures are all progressive in nature. However, the Government has also taken some considered steps to  raise income by marginally increasing tax rates on some items or introducing new taxes to fill the resource gap of Rs 3137 crore for which it intends to find ways and means. A major financial reform suggested by the FM is of the ex ante control of unnecessary dependence on the Finance Department in the line departments’ budget management will be done away with. He proposed to reorganize the 29 departmental demands for grant into four major sectoral categories-Administrative, Infrastructure Development, Social Sector and Economic Development.
The Finance Minister dealt at length with the power sector and presented separate budget. He has proposed an innovative formula according to which level of expenditure on this head will be financed through non debt creating receipts of Rs 58,000 crore and about Rs 18,000 crore of borrowings. The FM has suggested giving preference to the projects, which will be completed within a span of 3 years, except, the mega projects like hydropower projects or large connectivity projects. Fixing of time frame for smaller power projects would contribute immensely to the improvement of power supply. The FM hopes that the State will be part of the big project of the Union Government which intends to provide power to each and every household under its schemes. However, time frame for mega power projects has not been specified as it depends on the nature of the project under contemplation.
In final analysis we can call it a balanced budget with obvious tilt towards the welfare of the people. The investment policy of the Government should be able to turn a new leaf in its economy.


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