The Jammu and Kashmir government today unveiled a Rs 80,313 crore budget, which Finance Minister claimed as being a “potential game-changer budget full of welfare initiatives.”
The budget has multiple sops for farmers and industry, and a pledge to implement 7th Pay Commission from April with 1 percent DA for government employees, besides a slew of various amnesties.
“Despite being liberal, my budget numbers for the year 2018-19 are looking good. I propose to spend Rs 80,313 crore in the course of the year. Of this, Rs 29,128 crore is going to be the capital spending.
“This is by far the highest capital spend in the economy of J&K,” Finance Minister Dr. Haseeb A. Drabu said in the Legislative Assembly here today.
He proposed to raise about Rs 9,000 crore in the next financial year, Rs 331 crore higher than the last year.
The Finance Minister said J&K is the first state in the country that is presenting the budget in the first half of the last quarter of the current fiscal while the central budget is taking place a month later.
“We are the first state to move from the archaic Plan-Non Plan Expenditure to Capital and Revenue Expenditure which was followed by other states. All the systematic changes been made so far have started paying off,” he said and added that a new, robust, sustainable and people-friendly financial architecture is taking shape in the state.
“When I took over as the Finance Minister, there were huge departmental liabilities of more than Rs 11000 crores of which Rs 7,000 crore were of power and Rs 4,000 crore across all departments. 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 3,000 crore,” he said.
The Finance Minister said the state was facing an unfunded resource gap of over Rs 3,000 crore.
“As the year comes to an end, I have a surplus of more than Rs 1300 crore. The fiscal deficit which is regarded to be the single most important indicator of fiscal performance, was estimated at around 9.5 percent but has actually turned out to be around 5.7 percent; an improvement of nearly 400 basis points. This is unprecedented,” he said and added it indicates that systems, which were in a state of disarray, have started stabilizing and functioning in a better way now.
Speaking at a press conference later, Drabu said: “It is balanced budget with an aim of restructuring, cleaning up, protecting industries, welfare of employees serving in difficult conditions, addressing youth.”
Compared to last year, he said, the state will finance an additional capital expenditure of Rs 3,282 crore with an additional borrowing of only Rs 331 crore. “The incremental borrowing to capex ratio is 1:10. This must be the best ratio anywhere in the country.”
He said the revenue receipts position is looking even better. The aggregate revenue receipts are estimated to be Rs 64,269 crore compared to Rs 55,307 crore in the current financial year.
The state’s own tax revenue is estimated to be more than Rs 11,000 crore.
“As a result, I am not leaving any funded gap in the budget this year,” Drabu said.
He said that for 2018-19, the state government has decided to launch a Completion Plan for languishing bridges, schools and water supply schemes.
Of the total receipts Rs 64,269 crore, Revenue Receipts are Rs 51,185 crore and Own Tax Revenue is estimated at Rs 11,194 crore, he added.
The share of Central Taxes is up at Rs 12,984 crore as against Rs 11,803 crore in Revised Estimates 2017-18, he said, adding that the Revenue Deficit Grants of Rs 12,952 crore as against Rs 11849 crore in 2017-18.
The Capital Receipts are estimated at Rs 16,044 crore with total expenditure at Rs 80,313 crore.
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 are for regular capex and Rs 10,423 crore under the Centrally Sponsored Schemes.
Drabu said Rs 8,300 crore is under Prime Minister’s Development Programme (TAMEIR), while Rs 1,077 crore are 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 percent 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 1430 crore over the revised target of Rs 15525 crore, he added.
The Tax revenue expected to grow by around 10.43 percent over the current years RE, he added.
For government employees, the government announced in the budget grant of 1 percent Dearness Allowance due to the employees from 1st July 2017, and Committed to implement 7th Pay Commission Recommendations from April 01, 2018, which will be effective from 1st January, 2016.
The unmarried daughters of the employees, who were not entitled to receive pension, have now been made eligible to receive pension once the employee and his and her spouse is no more, he said.
The government also enhanced the Deposit Linked Insurance of GP Fund subscribers from Rs 10 lakh to Rs 50 lakh.
Similar scheme shall be framed for the employees covered under NPS.
The Minister said that all the government employees including pensioners, along with five family members, will be covered under improved and enhanced Group Mediclaim Insurance Policy.
Given the fact that there are 4.5 lakh employees, and about 1.5 lakh pensioners, this insurance cover extends to about 30 lakh people, he added.
The government has increased the Personal Accidental Insurance from Rs 5 lakh to Rs 10 lakhs and “Assured Career Progression Scheme” for all the Gazetted cadres of engineering departments, he added.
To revive the traditional handicrafts industry of Kashmir, Drabu said the government is setting aside Rs 5 crore each to the Handicraft Development and Handloom Development Corporations for raw material and inventory upgradation.
“This will set them on a path of recovery and from there we will clean their balance sheets and restructure their business operations as is underway in the case of J&K HPMC,” he said.
For businesses and industries and traders, the government will consider providing alternate incentive in lieu of CST to the industrial units in the state, he added.
The Finance Minister said the last few years have been very damaging for business in general. “Be it tourism, manufacturing, or household enterprises, all are in one kind of a distress or the other. First the localised factors; floods of 2014, and then the disturbances of 2016, then came the policy shock of demonetisation which was followed by a major tax regime change, the Goods and Services Tax.
“The short-term disruptive influence has been more pronounced on the SMEs all around the country, more so in J&K,” he said.
“Considering the importance of industries for employment generation, I also propose an incentive for SMEs and industrial units to get them listed at SME Exchange and other Stock Exchanges in the country to raise capital through IPOs or other market tools. I make an initial budgetary provision of Rs. 1.00 crore and will provide additional money, if required,” he said.
To mitigate the losses suffered during the floods of 2014 and the situation in 2016, Drabu said the RBI approved a loan restructuring package for borrowers in the state.
“In deference to our Chief Minister, I have decided to rollout a ‘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. In other words, one third of the monthly installment will be paid by the state government and two thirds will be paid by the borrowers,” he said and added that it is a conscientious and caring budget reaching out to every section of the society.