Excelsior Correspondent
SRINAGAR, Oct 15: To initiate public expenditure reforms and effective management of resources, Government has announced advancing of budget presentation to January for the next fiscal.
“This will enable that the resources are available by March end and public works are started by April next year, when the working season starts,” Finance Minister Haseeb Drabu said addressing a budget preparatory meeting of the Administrative Secretaries here.
The Minister asked them to evolve expenditure policies of their respective departments regardless of the resources required.
He emphasised quality of expenditure over the quantum of resources, insisting that it was the only way to ensure that the surging transaction costs on governance are used for productive changes.
To increase the capacity of the economy and infuse fiscal discipline, the annual Budget for 2016-17 would be presented in January instead of March followed by mid-year review in August, Drabu said.
“This will ensure that the objectives of the budget are met satisfactorily,” he said adding “if there are some problems, we can initiate course corrections like re-allocation, re-appropriation or other corrective measures within time.”
The Finance Minister said the biggest problem with State’s economy is that the system is not able to spend more due to short working period and other issues.
“So what I propose is to start early, so that planning and tendering process kick starts in right earnest and development activities do not suffer on this count and are insulated from vagaries of nature and short working seasons in some areas,” he said.
“Budget should not be about numbers but it must outline the fiscal policy and development strategy of the Government and must be directed towards policy outcomes on Government priorities,” he said.
Drabu said “expenditure efficiency must define the outcome of expenditure and for this we can attempt zero budgeting than incremental budgeting, which is in vogue.”
He said availability of resources comes only next to the quality of expenditure.
“We may have lot of resources but more important is how we are spending and for what?” Drabu said and called for institutional audit and social audit going side by side.
The Finance Minister said 14th Finance Commission award has made it abundantly clear about the availability of resources with the State Government which must “encourage us to use it properly and as per our priorities with emphasis on improving absorption capacity of the state”.
Drabu suggested that the State’s General Administration Department should move beyond the routine transfers and become the HRD cell of the State Government adding that the IT department should get converted into a service that facilitates governance.
He said IT is the only platform that can help J&K reduce the transaction costs of the governance which right now are the highest in the country.
Similarly, he said the State’s Planning Department should evolve into a Capex Strategy and Monitoring department.
“This will give the particular department a new role in the wake of the policy shifts at the federal level,” he said.
Stressing on increasing the efficiency of resources, the Finance Minister said after spending the money, the State should be able to verify the outcome in terms of assets created.
Drabu said the Government is going through a process to “clean up” the Budget and make it clearer to public.
“We are doing away with the complexities like Plan and Non Plan definitions and moving towards a simple Revenue and Capital budget which even a layman can understand,” he said.
The Finance Minister also called for postponing the economic survey towards mid of next year.
“The current economic survey in March contains figures of last September which do not serve any purpose,” he said.
The Finance Minister said the real value of the budget is not its size of revenue but its quality and structure, which the State is trying to achieve.
“The State is trying to evolve a new economic policy which would be different than the past practice based on control finances,” he said adding “I want to make the system autonomous and devolve more powers to departments.”
He emphasised on the importance of management of assets that the State Government is creating. Maintaining the assets almost equals creation of assets and every department should keep part of the budget aside for this purpose, he said.
He also called for social audit of all institutes to determine what they are doing with public money.
“We have… Universities and hospitals that take money from us but we don’t know what they do. The social audit will help us to see their achievements. May be some of them have a patent or two and that will become a goldmine for us,” the Finance Minister said.
He also expressed concern over Centrally Sponsored Schemes for which the State will ultimately have to find resources to fund.
To contain the rising prices of land and provide an alternative to investments, Drabu also proposed to float Land bond.
The Finance Minister asked the Health Department to explore Public Private Partnership model in case of some health institutes and diagnostic centres.
For education, he asked the concerned department to explore e-learning and smart classes for urban as well as rural areas.
Regarding various State Corporations, the Finance Minister said that the Government will work to clean them up and divest over a period of time.
Chief Secretary, B R Sharma, Commissioner/Secretary Finance, Navin Kumar Choudhary, Administrative Secretaries and officers of the Finance and Planning Departments were present at the meeting.
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