* Liabilities down to Rs 600 cr
* Power, tax amnesty introduced
JAMMU, Jan 11: Finance Minister Dr Haseeb Drabu today presented Rs 80,313 crores worth general budget for Jammu and Kashmir for the Financial Year 2018-19 in which he gave major boost to industry and tourism sectors, announced series of sops for around 4.5 lakh Government employees, abolished Lower Munda and Heerpur Toll Posts, waived off toll on some items and exempted non-commercial vehicles from toll while raising it marginally on other items at Lakhanpur and also approved amnesty on payment of arrears and taxes in some sectors besides extending other benefits to different sections including youths.
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As reported exclusively by the Excelsior, Dr Drabu presented separate budget for Panchayats and did away with the practice of presentation of separate power budget.
In his 100 minutes speech on general budget and Panchayat budget, which was heard with rapt attention by Chief Minister Mehbooba Mufti, Opposition leader Omar Abdullah and majority of his Cabinet colleagues and legislators, Drabu said out of Rs 80,313 crore worth budget, Rs 29,128 crore will be the capital spending, the highest in the economy of Jammu and Kashmir. He proposed to raise Rs 9,000 crore from the market borrowings, Rs 331 crore higher than last year with which the Government would finance an additional capital expenditure of Rs 3282 crore.
In the Legislative Council, Minister of State for Finance, Ajay Nanda presented the general and Panchayat budgets.
Dr Drabu made an initial provision of Rs 10 crore for facilitating the setting up of Rural Industrial Estates across the State.
“The aggregate revenue receipts are estimated around Rs 64,269 crore during 2018-19 compared to Rs 55,307 crore in 2017-18. J&K’s own tax revenue was estimated to be more than Rs 11,000 crore. Therefore, there will be no funded gap in the budget this year,” Drabu said.
On crucial issue of toll being charged at Lakhanpur despite imposition of Goods and Services Tax (GST) in J&K like other parts of the country, the Finance Minister said imposition of toll was well within the legislative competence of the State Government as only Entry Tax and Octroi have been subsumed in the GST.
However, he announced exemption of 12 items from the toll including vegetables, medicines, sugar, salt, tea, soaps/detergents, sanitary items, water coconut, wheat seeds, tree spray oil, newsprint and jiggery (Gur). On all other products manufactured by the local industry, toll will continue to be levied.
He proposed abolition of basic toll of Rs 80 on all non-commercial and private Light Motor Vehicles at Lakhanpur and Lower Munda. He also abolished toll on export of gypsum. While there was no toll on export of apples, he abolished toll on export of all types of fruits produced within the State. This, he said, will cause the State a revenue loss of Rs 100 crores. At the same time, he raised toll from existing slab of Rs 80 per quintal to Rs 100 per quintal and included wheat bran in the slab.
Announcing abolition of Lower Munda and Heerpur Toll Posts, which were giving the State annual toll revenue of Rs 22 crore, Drabu said this will create single unified market within Jammu and Kashmir. He proposed imposition of additional tax on such goods, having destination of sale outside the State but being brought for consumption in the State, equivalent to the rate of State Goods and Services Tax. This, he said, will protect interests of local traders. This will be effective from April 1, 2018. He proposed to raise the toll on tobacco, in all forms from existing Rs 290 per quintal to Rs 400 per quintal.
The Finance Minister announced slew of incentives and exemption for the industries.
“The Government will consider providing suitable incentive in lieu of CST exemption to the industrial units in the State. The Government will provide freight subsidy to the industrial units located in the State and transporting their manufactured goods beyond 1000 kilometers outside the State. The Government will also make available refund of SGST on value addition to all the industrial units, which were hitherto eligible for VAT exemption,” Dr Drabu said and hoped that these measures will adequately restore the competitiveness enjoyed by our industries in pre-GST era.
Announcing that the Government has decided to treat hotels and resorts at par with the industries so far as payment of power tariff is concerned, he said from April 1, they will now have to pay the same power tariff as is applicable to the industries.
Dr Drabu announced debt relief measures for industries and businesses including those related to the tourism
“I have decided to rollout “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, which means one third of the monthly installment will be paid by the State Government and two third by the borrowers. However, the Government will pay its share only when the borrowers contribute their share first,” he said, adding the scheme will be operative for two years from January 1, 2018 to December 31, 2020.
He announced initial provision of Rs 200 crore for the purpose.
Recalling that under erstwhile Prime Minister’s Package 2014, soft loans were advanced by different banks to houseboat owners, which became NPAs due to non-repayment by the borrowers, Dr Drabu said he had cleared the liability last year but again this year, the Tourism Department has forwarded fresh claim of Rs 147.23 lakh regarding waiver of soft loans of 19 houseboat owners. He proposed one-time waiver of all such loan cases.
The Finance Minister also listed some amnesty schemes.
He proposed to grant waiver of penalty and interests on arrears of tax in respect of all the dealers registered under the provisions of J&K Value Added Tax, 2005 and J&K General Sales Tax Act, 1962. This amnesty, he added, will also apply to Telecom operators registered under the provisions of J&K GST Act.
He decided to waive off interest and penalty on all power arrears owed to the Government by the industrialists, hoteliers and tourist resort owners. He also proposed to waive off interest and penal charges on the power arrears of Small Scale Industries till December 31, 2017. For industrial units declared sick by the Industries and Commerce Department, he waived off penal interest and surcharge on power dues. He proposed to waive off all past arrears of passenger tax up to December 31, 2017. He proposed to set up high-level Committee under the chairmanship of Principal Secretary, Finance for working out roadmap for revival of the transport sector within the next three months.
Reiterating that the Government would implement 7th Pay Commission recommendations from April 1, 2018, Dr Drabu said the report will be effective from January 1, 2016. He announced release of one per cent Dearness Allowance due to the employees from July 1, 2017. He added that cadre review issues of the Secretariat employees will also be appropriately addressed. He recalled that qualifying service for full pension has already been reduced from 28 years to 20 years.
In another significant announcement, the Finance Minister said the “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. He proposed to enhance 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 New Pension Scheme (NPS). The Group Mediclaim Insurance Policy will cover 30 lakh people including 4.5 lakh employees, 1.5 lakh pensioners and their family members.
“While the employees of autonomous bodies, PSUs, Local Bodies etc are free to voluntarily opt for this scheme, I am making the scheme applicable to accredited working journalists also,” he said and added that the Government has increased Personal Accidental Insurance from Rs 5 lakh to Rs 10 lakh.
Dr Drabu announced “Assured Career Progression Scheme’ (ACPS) for all gazetted cadres of Engineering departments on the analogy of MACP in the Government of India, which will be notified shortly. He noted that Junior Engineers often retires as an Assistant Engineer or a Chief Engineer retires only in the substantive grade of AEE.
“To address wider aspirations, I propose to extend benefit of ACPS to other technical cadres like Agriculture, Horticulture, Animal and Sheep Husbandry as well,” Dr Drabu said and added that three financial up gradations counted from the direct entry grade will be assured to Gazetted Officers on completion of 10, 20 and 30 years’ service strictly on the pattern existing in Government of India. The scheme will come into effect from April 1, 2018.
He announced that the Government has decided to set up a Corpus Fund of Rs 12,000 crore, which will be used for making GPF payments to the Government employees in future.
Dr Drabu said he was keen to bring electricity under the ambit of our GST. Reasons for this was that under GST Input Tax, credit can be availed for electricity, which will boost industrial sector and encourage investment in power projects in the State.
“While as power and Real Estates legislations to plug loop holes can be the areas to start with, we can include petroleum products, liquor etc in this scheme in next phase,” he said, adding it was important to design a GST for sale and purchase of real estate.
Referring to the Chief Minister and the Deputy Chief Minister setting up the standards and relinquishing their ex-officio positions as Chairman and Vice Chairman of J&K SPDC Board respectively, Dr Drabu announced that he was emulating them and stepping down from his ex-officio position as Chairman of the J&K State Finance Corporation. He proposed Rs 8 crore equity support from the Government to J&K Asset Reconstruction Company.
Dr Drabu said when he took over as the Finance Minister, the Government had liabilities of Rs 11,000 crores including Rs 7000 crores in power and Rs 4000 crores across all departments. Worse, many bills had been pending for months at the treasuries for want of liquidity.
“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 3000 crores. But even this is not acceptable and the good part is that both these liabilities are covered by resources in sight with power bonds to defray power liabilities and a surplus of Rs 1319 crore to more than cover up the work done liabilities,” he said.
Referring to budgetary management, the Finance Minister said an early budget combined with a new system of releases-all monies were released on February 10 and 11, 2017-along with strict discipline of no re-appropriation after December 31, 2017 has resulted in more than 50 per cent of the outlays being spent by December 31, 2017.
Referring to current Financial year of 2017-18, Dr Drabu said tax revenues were estimated to be Rs 9931 crores but they crossed Rs 10,000 crore mark; the Government had estimated an unfunded resource gap of over Rs 3,000 crore but as the year comes to an end, it has surplus of more than Rs 1300 crore while the fiscal deficit, which is regarded as single most important indicator of fiscal performance, was estimated at around 9.5 per cent but has actually turned out to 5.7 per cent, an improvement of 400 basis points, which was unprecedented.
For youths, he proposed Rs 5 crore to set up proper career counseling framework. He also proposed educational learning tours for the students to different cities of the country and, for the purpose, proposed an initial sum of Rs 10 crore. The legislators can nominate 50 boys and 50 girls from their constituencies for such tours.
For marginalized sections, Drabu proposed treating every transgender as living under Below Poverty Line (BPL) unless indicated otherwise and will be entitled to Government amenities and programmes available to the BPL category like cheap food-grains, LPG, electricity connections, IAY schemes etc. He also proposed life and medical insurance cover and monthly sustenance pension on the pattern of old age pension for transgender people above the age of 60.
“In all cases, where gender re-assignment surgeries can be undertaken, entire cost of treatment would be borne by the State Government.
He proposed Rs 5 crore for maintenance and repair of orphanages and old age homes in the State. He said in the next couple of years, 15,000 low cost houses will be constructed in 35 cities/towns in the State for which DPRs have been prepared.
On development front, the Finance Minister announced construction of a logistic hub including an integrated dry port in the State for which the State Government and logistics arm of the Government of Dubai, DP World, will get into a joint venture.
He also proposed setting up of a J&K Renewal Energy Corporation to catalyze development of renewable energy resources.
Dr Drabu proposed capital infusion of Rs 255 crore in Anantnag Central Cooperative Bank, Baramulla Central Cooperative Bank and Jammu Central Cooperative Bank.
He proposed to set up Disaster Mitigation Fund with an initial corpus of Rs 10 crore. He also proposed creation of separate Department of Parliamentary Affairs for which necessary manpower will be provided.
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”.
He said that for 2018-19, the state government has decided to launch a Completion Plan for languishing bridges, schools and water supply schemes.
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 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 Minister’s 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.
The BPL families will be now covered under the insurance, he added.
Reaching out to youth of the State, Dr Drabu announced educational loan facility from banks with interest subvention on repayments till completion of course.
For the youth, the Government has decided that education loans will be made available from banks with interest subvention facility till course completion,” he said.
“A good number of students from our State aspire for higher intellectual pursuits in top universities of the world but are not able to realise their dreams due to financial constraints,” he said.
The Finance Minister said that students belonging to weaker sections and children of single mothers, who qualify top examinations to secure admissions in different universities, shall be provided interest subvention on the education loans till the completion of the course.
In order to widen the platform of vocational training opportunities to the lesser educated youth, the Minister proposed introducing more trades having entry qualification as 8th pass.
“This will be backed by required additional funding,” he added.
“To address the career counselling gaps in our employment sector, I have decided to institutionally intervene by putting in place a proper career counselling framework in the State at different levels. I, accordingly, propose to make an initial provision of Rs 5 crore for the purpose,” he added.
“A vast majority of our population has not stepped beyond Lakhanpur to see not only our country’s recent economic development, but also its great cultural diversity.
“It’s my firm belief that if our youth are exposed to the mainland, this will have positive impact on the situation in the state as well,” he added.
For the poor and marginalised, the Government had decided that the minimum wages of unskilled workers were raised from Rs 150 to Rs 225, while those of skilled labour to Rs 350 from Rs 225.
A new category of highly skilled worker was introduced and Rs 400 was fixed as the minimum wage.
“We have insured the lives of construction workers, 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; i.e. 15 lakh people,” he added.
The proposed Employment Code shall set out the framework for terms of employment and service of all the workers except domestic workers and agricultural labour and a strong, independent and separate labour judiciary, he added.
“Good finance is not an end in itself; it is a means to a social and humanitarian end.
This is especially so in J&K which has gone through unimaginable troubled times”, he added.
* Drabu steps down as J&K SFC ex-officio Chairman
* Lower Munda, Heerpur Toll Posts abolished
* Rs 225 cr for 3 Co-op Banks
* No toll on non-commercial vehicles at Lakhanpur
* Integrated Dry Port proposed for State
* Education loan for youths with interest subvention
* Separate Deptt of Parliamentary Affairs proposed
* Some items exempted from toll, raised on others
* Rural Industrial Estates to be set up
* Assured Career Profession Scheme for Engineers
* J&K’s own tax revenue estimated at Rs 11,000 cr
* Alternate incentives to industrial units in lieu of CST
* Freight subsidy to industrial units
* Hotels at par with industries on power tariff
* Debt relief for industry, businesses
* Houseboat owners’ loans waived off
* Waiver of penalty, interest on dealers’ arrears
* No penalty on power arrears by industry, hoteliers, resorts
* 7Th Pay Comm to be implemented from April 1, 2018
* 7th PC to be given January 1, 2016 effect
* Daughters entitled to pension
* Electricity may come under ambit of GST
* 3 financial upgradations to Gazetted Officers
* Rs 12,000 cr Corpus Fund for GPF payments
* State liabilities down to Rs 600 cr from Rs 11,000 cr
* Trans-genders to be treated as BPL
* Rs 5 cr for orphanages, old age homes
* 15,000 low cost houses to be constructed
* Rs 10 cr for Disaster Mitigation Fund
* Uniform Employment Code for State proposed
* Accredited Journalists to be covered under Mediclaim Insurance.
* Finance Minister Dr Haseeb Drabu had presented his previous budget for 2017-18 also on the same date i.e. January 11.
* He ended his speech with a couplet ‘Acha Hai Dil Kay Saath Rahay Pasban-e-aql, Lekin Kabhi Kabhi Isey Tanha Bhi Chhod Dey’!
* Drabu took 100 minutes to read both General and Panchayat budgets in the Legislative Assembly.
* He read the speech in English.
* This was his fourth budget in a row. However, he has done away with the practice of presenting separate power budget.
* At the end of Drabu’s budget speech, CPM MLA MY Tarigami wanted to know where the power budget is and created uproar for some time.
* Unlike yesterday’s boycott of Chief Minister Mehbooba Mufti’s reply on Motion of Thanks to Governor’s Address, the Opposition members including NC leader Omar Abdullah remained seated in the Assembly during Drabu’s budget speech.
* Chief Minister Mehbooba Mufti was also present during the budget speech and could be seen applauding parts of the speech.
* Before Drabu could start his budget speech, some of the Opposition MLAs protested for not being given time to speak during Zero Hour. However, Speaker Kavinder Gupta persuaded them saying the budget speech had to start on time i.e. 12 noon. The MLAs relented and Drabu started his speech within two minutes.
* Some channels telecast the budget live. The budget speech was also broadcasted live by some Radio Stations.
* An electric bulb fused during Drabu’s speech inside the Legislative Assembly complex, creating sound but everything went on smoothly.