SRINAGAR: Describing the second Budget of the People’s Democratic Party and Bharaiya Janata Party coalition government in the Legislative Assembly as pro-poor and pro-women, Finance Minister Haseeb Drabu said there is a need to restore the financial system of the state, which has been damaged in previous regimes.
“The financial systems have been violated by the previous government. In this budget I have tried to restore the financial systems by streamlining everything. That is why in order to come out of this mess, I have tried to give a system building budget,” Dr Drabu said while addressing a press conference after presenting state Budget in the Legislative Assembly.
Terming spending of budgeted money effectively as challenging, Dr Dradu said there is a need to develop a mechanism to tackle much spoken about limited working season, time taken to do the documentation or tendering, which directly postpones the start of the work leading to a delay in completion as well.
“The other challenge is to spend the budgeted money well. We are budgeting to spend about Rs 180 crore a day. Apart from much spoken about limited working season, our institutional capacity to spend is limited. Be it the time taken to do the documentation or tendering, or the installed and available capacity of the private sector the actual execution of works takes inordinately long to start and even longer to end.” he said.
Expressing concern over spending 150 per cent more than the actual expenditure on developmental works, he said it is a challenging task to reduce this ration from Rs 2.50 to Rs 1.
“The total expenditure is estimated to be Rs 64.669 crore during 2016-17. Of this, capital expenditure would be Rs 19.694 crore and revenue expenditure would be Rs 44.975 crore. What these large numbers mean is that we are spending Rs 2.50 in order to be able to spend Rs 1 on development.
To reduce this ratio from Rs 2.5 to Rs 1 and at least bring it at par with the development spend is the first dig challenge. But the road ahead is difficult as salaries and pensions alone counts for more than Rs 23000 crore which is more than the total developmental expenditure in the year,” he said.
Taking about the liquidity problems manifested in terms of unpaid bills at the treasury and the departments, he said, “A part of it happens due to inefficiencies in the management of public funds.” For example, he said a review of cash and liquidity management system revealed that over the years an abnormally large number of bank accounts had been opened by various departments of the government.
“The number if government accounts in J&K bank alone is staggering 2.31 lakh accounts. There will be a few thousands in other banks too,” he said. The Finance Minister said amid serious and severe shortage of liquidity, these accounts had a two-year average balance of around Rs 3,000 crore to Rs 4,000 crore.
“This idle parking of funds shows lax control as these monies ought to have been transferred to the government accounts as required under norms,” he said. We have initiated a process of consolidation and rationalisation of all government accounts so that this inefficient situation of unpaid salaries, contractor payments and other liabilities doesn’t coexist with bulging bank balances of a few department,” he said.
Asserting that a system of leveling financial resources was being put in place, he said this rationalisation initiative will help the government improving the financial discipline as well as ensure better liquidity management. (UNI)
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