Sanjeev Pargal
JAMMU, Feb 17: Finance Minister Abdul Rahim Rather said today that the State has proposed an equal plan component of Rs 7300 crores for next financial year like the current year but added that the Government would try and persuade the Planning Commission of India for an increase.
He said the Government has proposed a total plan outlay of Rs 11,900 crores including Rs 7300 crores worth annual plan, Rs 600 crores under Prime Minister’s Re-construction Plan and Rs 4000 crores under the Centrally Sponsored Schemes.
Replying to debate on the budget in the Legislative Assembly this afternoon, the Finance Minister said he was proposing the low annual plan for next financial year but the State Government would push for more.
“I have kept the annual plan for next financial year of 2014-15 exactly at the level of current fiscal year of 2013-14,’’ he said, adding the State would propose Rs 600 crores under the PMRP and Rs 4000 crores under the Centrally Sponsored Schemes taking total plan component to Rs 10,900 crores.
This would be for the third consecutive year when the State could get the same plan amount. During current year also, the level of annual plan and PMRP has been same at Rs 7300 crores and Rs 600 crores respectively.
However, Mr Rather admitted that during 2012-13, the Planning Commission of India despite approval of Rs 7300 crores worth annual plan, had imposed cut of Rs 1666 crores in the end including Rs 215 crores in Share of Central Taxes, Rs 451 crores in Special Plan Assistance and Rs 1000 crores in Market Borrowings.
“It was due to Rs 1666 crores worth cut in 2012-13 that our plan expenditure came down to 82 per cent,’’ he said responding to PDP leader and former Finance Minister Muzaffar Hussain Baig’s charge of low plan expenditure. He, however, added that plan expenditure during 2009-10, 2010-11 and 2011-12 was 95.9 per cent, 96.1 per cent and 96.3 per cent respectively.
“When the PDP held the portfolio of Finance and Planning, the plan expenditure was 85 per cent in 2006-07, 92.9 per cent in 2007-08 and 90.3 per cent 2008-09,’’ he added.
Responding to the points made by Mr Baig and Prof Chaman Lal Gupta during debate on the budget that the State was generating maximum revenue from liquor, Mr Rather declared that he stands for prohibition in Jammu and Kashmir and he would be the happiest person if the House agreed on the proposal and prohibition was implemented successfully.
Reiterating that he as a Finance Minister since 1983 has not issued even a single liquor license, Mr Rather declared that till he is alive and the Finance Minister, he would not issue any license in any part of the State.
“There are hundreds of applications pending before us for issuance of liquor licenses. There is pressure on us also. The pressure is more in Jammu. But, we have decided not to issue any liquor licenses as a policy decision,’’ he said pointing out that out of Rs 6700 crores worth revenue the State would get during current financial year, the excise duty and Sales Tax from liquor only amount for Rs 637 crores last year.
“I’m ready to surrender Rs 637 crores worth revenue for the sake of prohibition. We can search alternate methods of generating revenue. But first, the House must have a consensus and second, the prohibition had to be implemented successfully by checking clandestine import of liquor from outside the State,” the Finance Minister said and added that the Government can’t stop the people from voluntarily consuming liquor until the prohibition comes into force.
Admitting that revenue expenditure of the State was increasing due to salaries, pensions, allowances etc, Mr Rather said out of Rs 43,543 crores worth budget for 2014-15, which he had presented in the Legislative Assembly on February 13, only Rs 10,595 crores would be available for development expenditure.
Denying that State was increasingly becoming dependent on the Central Government as claimed in their budget speeches by Prof Chaman Lal Gupta and Harshdev Singh, the Finance Minister told the House that during 2013-14, the State’s own tax revenue was likely to touch Rs 6700 crores and the Government has projected a target of Rs 7500 crores worth tax base during 2014-15. The State’s revenue was just Rs 2683 crores when the present Government had taken over the affairs of the State.
While Mr Baig and Mr Singh were not present in the House during Mr Rather’s over 90 minutes reply to the budget speech, Prof Gupta was present.
“The State has recorded average annual growth of 30 per cent in the tax collection,’’ the Finance Minister said, adding it was indicative of financial management and not mismanagement as claimed by Mr Baig. The tax growth was despite the fact that the Government has refrained from imposing next taxes or increasing the existing taxes except for making minor adjustments.
Apart from increase in tax revenue, Mr Rather said, the non-tax revenue of Jammu and Kashmir mainly from power, water and irrigation was also expected around Rs 3560 crores.
Asserting that grant of plan, share from Central taxes etc was right of the State, the Finance Minister said these funds are given to the State under the Constitution of India and no one can stop them. He was reacting to the budget speech of Prof Gupta that what would happen to the State’s financial scenario if there was “unfavourable Government’’ at the Centre in the coming days.
“We will get our due under the Constitution of India. The person has not been born, who will come to the power at the Centre and stop our funds,’’ he said displaying the copy of the Constitution of India.
Taking a dig at the previous PDP Government, Mr Rather pointed out that Jammu and Kashmir had lost Rs 230 crores during two years (Rs 115 crores per year) when the State had PDP Finance Ministers. “It was during our Government that Rs 115 crores per year started coming from the Union of India as debt relief’’.
He said by bringing financial accountability and fiscal reforms, the State has been successfully able to bring down its fiscal deficit as per the assigned targets of the 13th Finance Commission. He added that against the target of 5.3 per cent in 2010-11, the fiscal deficit was 4.15 per cent. Similarly, against the target of 4.7 per cent in 2011-12, the achievement was of the order of 4.29 per cent and against the target of 4.2 per cent in 2012-13, the achievement registered was 3.91 per cent.
He recalled that fiscal deficit during previous regime was alarmingly high at 7.5 per cent in 2007-08.
Referring to the record increase in the tax revenue, Mr Rather quoted the CAG as saying “the State has made good use of the opportunities presented by increased economic activities to substantially increase tax revenue. There has been record mobilization of commercial taxes and stamp duties in 2011-12 and the State’s own revenue has shown very high growth. It is to the credit of the Government that the State’s dependence on non-debt resources from Central Government (as percentage of total expenditure) has come down from 67 per cent in 2006-07 to 63 per cent in 2011-12”.
Mr Rather said even as concerns remained about delay in completion of ongoing projects, the State Government’s capital expenditure has registered significant and steady increase, a stray peak in 2010-11 notwithstanding. The State had switched over to Government banking with the RBI with effect from April 1, 2011 after liquidating its entire over draft with the J&K Bank as on March 31 with special Central assistance in the form of grants-in-aid of Rs 1000 crore.
“During 2011-12, the interest burden on over draft / ways and means advances came down by over Rs 220 crore as a result of this switch over to new banking arrangements,’’ he disclosed.
Mr Rather said the State Government has taken significant decisions like introduction of new pension scheme, bringing more items under the ambit of VAT, more services under the tax net, computerization of commercial tax department and a host of institutional and sectoral reform measures.
“The arrears in the accounts of PSUs are being liquidated. All these are positive features”.
Saying that the State Government has been applauded by the Principal Accountant General for its good performance in fiscal discipline, Mr. Rather quoted, “the Principal Accountant General has eulogized the Finance Minister for providing exemplary leadership to the Finance Department and said that under his stewardship the financial discipline and the functioning of the department has improved. The Principal Accountant General has further said that J&K is one of the few States in India having an organized internal audit system in place for proper guidance and enforcement of the financial discipline”.
Responding to suggestions of some members, Mr Rather said that introduction of New Pension Scheme is a major reform measure as it will ensure that the employees recruited after January 1, 2010 receive guaranteed superannuation benefits and regular monthly pension in a structured manner adding that posterity shall be reaping the benefits of this measure.
He said the pension bill has reached whopping Rs 3673 crore during the current fiscal year, which was just Rs 938 crore in 2005-06 and was likely to reach to Rs 4000 crore next year.
“At present, the number of pensioners has reached to 1.61 lakh as against 90, 000 in 2005-06,’’ he said, adding: “the stipendiary mode of recruitment will facilitate engagement of large number of educated youth adding that unlike Rehbar-e-Zirat Scheme, youth recruited under this scheme shall be permanent employees of the Government from day one they get appointed’’.
Mr Rather also enumerated measures taken for the betterment and employment of educated unemployed youth adding an amount of Rs 98 crore has been paid as Seed Capital Fund so far and about 16634 persons are working in various enterprises under SKEWPY. Besides, around 50,000 un-employed educated youth are getting Voluntary Service Allowance (VSA) upon which Rs 50 crore are spent annually.
Mr Rather also gave a detailed account about the concessions and incentives provided to Agriculture and Industries sectors adding that tax relief amounting to about Rs. 750 crore was provided to Industrial sector to bring the State on the industrial map of the country and also help contain unemployment to some extent as it was not possible for the Government to give jobs to all.
About gender budgeting, Mr Rather said that a grant of Rs 3.5 crore has been earmarked in the budget in favour of J&K Women Development Corporation (JKWDC) for setting up of 220 Self Help Groups in all the districts of the State (one hundred in each district) involving 44000 women. He also dwelt on measures to be taken up for establishing a dependable cold chain mechanism for boosting horticulture industry in the State.
Responding to the demands of members, the Minister said that District Plan allocation has been almost doubled during the last five years adding that against Rs 968 crore in 2008-09, the allocation has increased to Rs 1971 crore during last fiscal. In addition, District Plans are also supplemented under the State Plan.
Mr Rather said that there has been a steady growth in the Gross State Domestic Product (GSDP) of the State during the last five years adding that in comparison to the GSDP figure of Rs 42314.84 crore at current prices during the year 2008-09, the GSDP reached Rs 75574.31 crore last year as per Quick Estimate, and is estimated to reach Rs 87318.72 crore during the current financial year as per Advance Estimate. It has more than doubled during the last five years. The current year’s rate of growth over the last year’s figure works to 15.54%.
“At constituent prices, the GSDP was Rs. 34664.22 crore in the year 2008-09. It is now estimated at Rs 45399.45 crore for the current financial year, indicating an increase of about 31 per cent”, he Rather added. He said the State’s growth rate during the current year was 5.88 per cent, better as compared to all India level of 4.88 per cent and J&K’s last year growth rate of 5.81 per cent.
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