Funds to be released before April end every year
Govt to go ahead with JKFRBM, BEAMS, W&M
JAMMU, Oct 28: The Jammu and Kashmir Government today revised its `Budget Manual’ setting roadmap for zero deficit budget, constitution of Special Committees for Fiscal Management and monitoring developmental works especially National Highways, bridges and road networks, completing process for distribution of funds before close of April every year, earmarking 10-15 percent of capital component of all departments for maintenance and retaining three major previous fiscal reforms including Ways & Means (W&M) from the Reserve Bank of India (RBI), Jammu and Kashmir Fiscal Responsibility and Budget Management Act, 2006 (JKFRBM) and Budget Estimation Allocation Management System (BEAMS).
The revised `Budget Manual’ was today approved by Lieutenant Governor Manoj Sinha and released by Financial Commissioner Finance Department Dr Arun Kumar Mehta. It was released by the Union Territory Government under Section 67 of Jammu and Kashmir Reorganization Act, 2019.
It said the process for distribution of funds should be completed as early as possible and in any case it should be made before close of month of April every year.
As per the Finance Department document, the Government will balance the budget to make it zero deficit by going for Additional Resource Mobilization (ARM), expenditure compression where possible and through market borrowings.
“As the Government can’t seek vote for expenditure without matching income, it is implied that it can’t have deficit budgets. Therefore, it will go for zero deficit budget by taking the adequate measures,” it said.
The `Budget Manual’ said the Union Territory Government will go ahead with three major financial reforms of the previous Governments including BEAMS, JKFRBM and W&M.
“The erstwhile Legislative Assembly had enacted JKFRBM Act, 2006 which shall remain in operation after implementation of the Jammu and Kashmir Reorganization Act from the appointed day without amendments as required under law,” as per the revised `Budget Manual’. It added that new system of classification coupled with implementation of BEAMS will be followed for Capital Expenditure purposes also. It will bring out a clear picture to facilitate computerization of accounts and formulation of the budget with real time on-line analysis.
“In order to give a scientific base to requirements of cash management, it will be proper to formulate a Ways & Means budget which also means drawing of fund flow forecast for the budget year and watch its behaviour while the budget is under implementation,” the Budget Manual said.
It added that it will be imperative to earmark 10-15 percent of capital component of all departments for maintenance.
In another significant decision, the Government has decided to constitute Project Clearance Committee(s) for their recommendation to taking of these as a part of the J&K budget. It will be incumbent upon the Departments to constitute such Committees with the concurrence of the Finance Department.
“The development works and projects have their own gestation period. It is highly necessary that these gestation periods are carefully evolved, determined and controlled. It has generally been seen that project construction periods, is not adequately controlled, can lead to time and cost over runs, further leading to the projects becoming unviable though considered to be viable at the time of their formulation. It then becomes difficult to accommodate these projects within the pre-fixed Plan Outlays without affecting other development programmes. In case of major projects, the Government will go for better guidelines for determination of financial requirements on annual basis,” it added.
The Government has called for management of subsidies in highly effective manner to minimize the chances of pilferage.
The document said the Government will ascertain expenditure forecasts for works, which are of strategic and national importance such as construction of National highways and border roads, from the respective authorities for their incorporation in the budget.
It said certain road works are financed from Central Road Fund and are described as CRF works. Subvention from this Fund is earmarked for taking up of road works as approved by the concerned Ministry of Government of India. Estimates for such works should be incorporated in the budget, it added.
“The Government of India has constituted National Highways Permanent Bridges Fund from out of the proceeds of levy of fees for services rendered relating to the use of permanent bridges on the National Highways. The amount available to the credit of this Fund is allocated by the Central Government for development of National Highways in the Union Territory of Jammu and Kashmir, which is over and above the normal plan allocation. Estimates of such works should be included in the budget,” as per the `Budget Manual’.
It proposed that accounts pertaining to transfer of the resources from the Government of Jammu and Kashmir to Local Self Governments will be maintained separately.