January 2018 News

Drabu Presents 'game-changer' Budget Of Rs 80,000 Crore

11 January 2018
Kashmir Reader

Jammu: Minister of Finance Dr Haseeb A Drabu on Thursday presented his 4th Budget in the State Assembly, which he described as 'a potential game-changer'. 'It will be a potential game-changer budget, full of welfare initiatives,' he said in the Assembly while presenting the Rs 80,313-crore budget for the fiscal 2018-19. 'This Budget is a culmination of sustained work in building new systems for public expenditure management over the last three years,' the minister said. 'We have made concerted and coordinated efforts to overhaul the style and substance of financial management of the state.' The Finance Minister said that J&K is the first state in the country that is presenting the budget in the first half of the last quarter of the fiscal year, while the central budget will be announced a month later. 'We were 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. The Finance Minister said it is perhaps for the first time in the budgetary history of J&K that the revised estimates for the current year are much better than the budget estimates presented last year. 'Revenue Estimates envisaged to be Rs 9,931 crore have been exceeded and, in the process, we have crossed the Rs 10,000 crore mark of our own tax collection,' he said. 'When I took over as the Finance Minister, there were huge departmental liabilities of more than Rs 11,000 crores of which Rs 7,000 crores were in power and Rs 4,000 crores across other departments. Today, the departmental liabilities have come down to just Rs 600 crore or so. Power purchase liabilities have been reduced to a little more than Rs 3,000 crore,' he said. Drabu said that last year, 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,' he informed. 'The fiscal deficit, which is regarded to be the single most important indicator of fiscal performance, was estimated at around 9.5 per cent but has actually turned out to be around 5.7 per cent; an improvement of nearly 400 basis points. This is unprecedented,' he said. 'Because of a well-run financial set-up, we are able to take decisions that change lives of the people for good, especially of the most vulnerable and marginalised. We hiked the minimum wages of the working class substantially and a new category of highly skilled worker was introduced and Rs 400 was fixed as the minimum wage,' he said. Announcing a slew of measures for the socially and economically disadvantaged, Drabu said the state government under the leadership of Chief Minister Mehbooba Mufti had woven a social security net for the poorest of the poor, insured their lives, protected them against disability, disease and death, provided for their children's education, and given them access to small credit. 'I am sure this will make life simpler and more secure for 3 lakh families,' he said. To revive the traditional handicrafts industry of Kashmir, the minister 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. In a major relief for state employees and pensioners, Drabu announced a corpus fund of Rs 12,000 crore, which will be used for making timely GPF payments to government employees. 'To express my gratitude to all the employees of the state government, I am announcing release of 1 per cent Dearness Allowance due to employees from 1st July, 2017. Our government is already committed to the implementation of 7th Pay Commission Recommendations from April 1, 2018, which will be effective from 1st January, 2016,' he said. 'Being an employee friendly government, we recently reduced the eligibility for full pension from 28 years of qualifying service to 20 years of qualifying service. This measure alone will benefit more than half the number of employees on the rolls of the government, as they were denied full pension for want of qualifying service,' he said. As a major social security initiative for children who lose their parents and for unmarried daughters of employees who were hitherto not entitled to receive pension, they have now been made eligible to receive pension once the employee and his-her spouse is no more. 'This is a step towards promoting gender equity as well. Also, the Group Mediclaim Insurance Policy which in the past covered only gazetted employees, will now also be available to government employees including pensioners and accredited journalists. 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 said and added that BPL families would be now covered under the insurance. To cater to the rural areas of the state, where government employees are reluctant to get posted, the Finance Minister said such a practice has adversely affected service delivery. 'In order to incentivise transfers and postings in rural areas, the government shall come out with a scheme to incentivise the postings in remote areas. Besides having rational framework of allowances, it will also have a built-in incentive for postings in rural areas while dis-incentivising 'deployment' in urban areas,' he said. The Finance Minister said the last few years had been very damaging for business in general. 'Be it tourism, manufacturing, or household enterprises, all are in one kind of distress or the other,' 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 losses suffered during the floods of 2014 and due to the situation in 2016, Drabu said the RBI has 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 instalment will be paid by the state government and two-third will be paid by the borrowers,' he said.