Drabu’s budget aims to ‘end begging bowl impression, enlarge peace constituency’

Drabu asserted he has done away with “plan and non-plan classifications” as seen in the previous budget, “to enlarge the constituency of peace and come out of impression of going to New Delhi with a begging bowl.”

At the beginning of his budget speech, Drabu said it is “professionally a privilege and personally a pleasure” to present the budget.

“Without exception, every incoming finance minister has invariably declared with a dramatic flourish in this House that the state coffers are empty,” he said.

“I shall not talk about the legacy that I have inherited as the Finance Minister. Instead, I shall table in this session of the Assembly a white paper on the state finances done by an independent specialist research firm. That shall be the baseline against which the performance of this government can be judged.”

The Finance Minister read out his budget speech for one hour in the Assembly amid praises from the treasury benches.

Out of Rs 4673 crore, Rs 35,227 crore have been kept as “current or revenue expenditure.”

“The total revenue receipts of the State in 2015-16 are budgeted to be Rs 42,137 crore leaving a resource gap of Rs 4336 crore. This is going to be financed by prepositioning of the 14th Finance Commission grants without seeking any additional funding,” he said.

Having just Rs 11,246 crore for building assets, Dr Drabu said, “is not a good position to be in.” “In fact, it should be exactly the other way round. But there is no way I can help it as it is a legacy of the last 30 years,” he said.

Later, addressing media-men in the lawns of Civil Secretariat, the Finance Minister—while explaining the broader contours of his budget—said he had to present the budget in two parts—the financial statement and the power budget. “Power is the biggest problem for our economy,” he said.

“Budget is not about accounts. It is about reviving the economy. My endeavor in this budget is to enlarge the constituency of peace and to come out the impression that we have to go to Delhi with a begging bowl.”

He said the problem the State is facing is simple.

“To spend Rs 10,000 crore on the economy, the government is spending nearly three times that amount on the machinery,” Drabu said.

“I have completely changed the framework of the budget. Our budget will now have only two parts: receipts budget and the expenditure budget. The expenditure budget in turn now has only the revenue and capital expenditure estimates.”

The Finance Minister said the old classification of the plan and non-plan has been discarded.

“This is a major change which has far reaching implications on the allocation, efficiency and monitoring of public expenditure,” he said.

“In the years to come, we can start with mapping of asset creation with money that has been spent. This was impossible in the earlier classification. In the next budget, we will come up the details of the physical assets that have been created on the ground by the money spent.”

ON REHABILITATION OF FLOOD VICTIMS

The Finance Minister said the focus has to be on businesses and houses affected by the last year’s deluge.

“The biggest issue we are facing is the rehabilitation of flood victims. The previous government had submitted a memorandum to the Government of India seeking financial assistance of Rs 43960 crore,” he said. “In the interest of speedy disbursement, we have no choice but to endorse it. But the fact is that it I am neither convinced by the method in which it has been estimated nor the manner in which it has been designed. It is far too adhoc and arbitrary for comfort.”

He said the former Chief Minister Omar Abdullah didn’t pursue the proposal. “He didn’t go to Delhi to press for it,” Drabu alleged.

He said there is a need of focusing not only on areas that are flood affected but also those that are flood impacted. “Second is to move away from being asset-centric towards restoration of livelihood. Third is to give some tangible relief to commercial enterprises and household on their liabilities—repayment and interest on bank loans and taxation to government,” he said.

To ensure rehabilitation is done on fast-track basis, he said the government will start the process in the first week of April.

“We have created a relief and rehabilitation department. The department will coordinate all the relief and rehabilitation activities across all sectors,” he said.

“Also, with the World Bank ready to disburse 250 million US dollars, we have created a Project Monitoring Unit (PMU) that will monitor the multi-sectoral projects to be implemented under Flood Recovery and Restoration programme to be supported by the World Bank.”

TOURISM SECTOR

For tourism sector that has suffered colossal losses in the floods, Drabu said he has proposed to continue the exemption under the GST in respect of lodging services provided by hotels, lodges, and guest houses up to March 2016.

“To give relief and help refurbish and rebuild hotel infrastructure, I have proposed to exempt all hoteliers from payment of entry tax on furniture/office equipment/ other goods imported into the state till June 2015.”

LOAN WAIVER FOR FARMERS

“I have proposed to waive off 50 per cent of the Kisan Credit Card (KCC) loans for the smallest and most vulnerable farmers who have an outstanding balance of less than Rs 1 lakh. Rs 150 crore have been earmarked for this,” the Finance Minister said.

Outsourcing toll collection at Lakhanpur “We have decided to outsource or privatize the toll collection at Lakhanpur which is the main source of corruption. The basic motive is to ensure 24×7 efficient and corruption free working so that no vehicle remains stranded there,” Drabu said.

CULTURAL VILLAGES FOR KPS

“The government proposes to lay focus on construction of model ethnographic villages to showcase intrinsic cultural and heritage strengths of our people. The first pilot cultural village will be the one that was inhabited by Kashmir Pandits,” he told reporters.

“It will be re-built to recreate aspects relating to the tradition and culture of KPs.”

Drabu said the village will come up in Pulwama district of South Kashmir.

VAT REMISSION FOR LOCAL INDUSTRY

The finance minister said he has proposed to extend concession of VAT remission to the local industry by another year: March 31, 2016.

He also said that new industrial policy is being formulated that will be announced on July 1, 2015.

“The existing policy with all its incentives and remissions will be in force till June 30, 2015,” Drabu said. He also said that 10,000 kanals of land have been identified across the State for developing industrial estates. The Finance Minster also abolished “Aabiyana” irrigation tax to provide relief to the farmers.

ON UNEMPLOYED YOUTH

The Finance Minister said the government’s mission is to educate, employ and empower youth of J&K.

“To prepare the young people to meet the challenges of future, the government is planning a series of coordinated progressive programs and activities in the coming days,” he said.

“The voluntary service allowance paid to the educated youth will now be utilized to build their entrepreneurial capacities for self employment.”

He said the government will try to make government jobs least attractive and private sector more attractive.

“Why to stick to Rs 9 lakh a year when you can earn Rs 1 crore a year in private sector?” he said in reply to a query.

J&K Banks arrangement with RBI to Continue

Finance Minister said that ways and means arrangements between J&K Bank and RBI will continue.

“We will think whether we can do away with it or not. But for a time being this arrangement will continue,” he said.

DA FOR EMPLOYEES

“Two installments of Dearness Allowance (DA) due from January 2014 amounting to 17 per cent could not be paid to employees/ pensioners so far due to financial difficulties faced by the government in the aftermath of floods,” the finance minister said.

“A budgetary provision of Rs 2200 crore has been kept during the next year. DA pending March 31, 2015 shall be credited into the GP fund account of the employees while DA will be paid in cash form from April onwards.”

He said employees covered under the National Pension Scheme (NPS) and pensioners will, however, receive the arrears in case.

ZERO% TAX RATE FOR ITEMS USED BY COMMON MAN

Price rise in the items used by common man is a major concern.

“On commodities like Paddy, Rice, Wheat, Pulses, Floor, Atta, Maida, Suji and Besan, I have proposed to continue these items in the zero per cent tax rate under J&K VAT Act, 2005,” the Finance Minister said.
ON CORRUPTION

The Finance Minister said that Vigilance Commission needs to be transparent so that corruption ends.

“We have never seen an institution rewarding an honest official. A person is not born as a corrupt, the fault lies with the system,” he said.

About package about surrendered militants, the Finance Minister said the issue is related to defence and only the State cabinet can take a decision about it.

The previous government in its rehabilitation policy had assured skill development training for the youth who would return from the Pakistan administered Kashmir to live their life afresh. However, no such initiative was taken.