J&K tops in revenue generation increase:
In a major decision to curb mounting losses in power sector and bring revenue at par with electricity purchase bill, the State Government planned to introduce ‘Energy Accounting System’ in the State under which the Power Development Department (PDD) officials would be made accountable for the load consumed and shown on the papers in their areas.
The new system was expected to be in place from the next financial year beginning April 1, 2012.
An announcement to this effect was made by Finance Minister Abdul Rahim Rather while replying to four days long discussion on the general budget 2012-13 in the Legislative Assembly today.
In his 101 minutes reply, Mr Rather said the ‘Energy Accounting System’ was necessitated as actual load consumed in the areas didn’t match to the billing. "The officials would be accountable. If a transformer was showing 100 KV load, it must also reflect on the bills and papers’’, he said.
Chief Minister Omar Abdullah, who holds power portfolio, was expected to make a detailed announcement on ‘Energy Accounting System’ during grants of his Ministry in the Assembly on March 27 and 28.
The electricity purchase bill for current year was expected to be around ` 3000 crore while it has been estimated in next year’s budget at Rs 3100 crore. Mr Rather said the Government was expecting around ` 1100 crore to ` 1200 crore worth revenue from power during current year, which means net losses to the tune of ` 1800 crore to Rs 1900 crore. Next financial year’s revenue target has been fixed at ` 1725 crore.
He recalled that revenue generation from electricity was just ` 600 crore during 2008-09 when present dispensation took over reign of affairs. The revenue has doubled in three years, he said.
On construction of small power projects of 10 mw, he said the Government has started receiving good response and 61 offers have already poured in.
Admitting PDP leader and former Finance Minister Muzaffar Baig’s assertion during his speech on the budget that the way funding provision has been kept for some hospitals it would take several years for them to complete, Mr Rather said he has taken up the issue with the Health Department. Promising to improve funding for early commissioning of hospitals, he added that funds for the hospitals required earlier would be given more generously.
Referring to the issue of daily wagers raised by various speakers while participating in the budget debate including Prof Chaman Lal Gupta and Harshdev Singh, the Finance Minister recalled that there were 59,000 daily wagers in 1994 when an official order was issued that all daily wagers completing seven years of services would be regularized. At the same time, the order had mentioned that no daily wager would be appointed in future.
"Of 59,000, we have regularized 56,000 daily wagers. Three thousand daily wagers were left due to lacunas in their orders’’, he said, adding that a number of casual and need base workers had been engaged after 1994.
Mr Rather said a Cabinet Sub Committee was being formed to look into all issues including violation of 1994 order, financial implications on making payments to casual and need base workers, the authorities which appointed them etc. "The information was not coming. We have again written to the Departments seeking information and will take a decision shortly’’, he added.
The Finance Minister said Jammu and Kashmir State has topped in the country in increase in revenue generation during the current year. He disclosed that this fact was admitted at no less a forum than Empowered Committee of Finance Ministers of the country.
"Jammu and Kashmir has recorded an increase of 43.1 per cent in the current financial year and topped in the country’’, Mr Rather said and also referred to increase registered by other States ranging from 15 per cent by New Delhi to 22 per cent by Maharashtra and 38 per cent by Chattisgarh.
He said grown on both tax and non-tax fronts was 14 per cent during 2003 to 2008 while it went up to 26 per cent from 2008 to 2012.
"There were no tricks of trade as mentioned by Mr Baig but we have recorded 34.8 per cent growth in tax revenue from ` 3500 crore to ` 4800 crore during current year’’, he added.
The Finance Minister, who had presented 12 budgets and two Vote on Accounts also countered Mr Baig’s charges on Per Capita Income. He said the figured were based on 2004-05 prices for Gross State Domestic Product. The parameters for taking the year to decide the price are taken by the Planning Commission and not by the State Government. "It’s a globally accepted and recognized principle to determine Per Capita Income’’.
On NPP leader Harshdev Singh’s charge that Per Capita Income of ` 41,833 was not an indicator of rich and poor ratio, Mr Rather said even daily wagers in the State have Per Capita Income of ` 34860. "There were not much disparities in J&K in rich and poor ratio. All aspects fixed by Central Statistics Organisation have been taken into account to determine Per Capita Income’’, he added.
The Finance Minister didn’t agree with the claims of some MLAs that the State’s dependence was increasing on the Central Government. He said the grant-in-aid for the State was decided by the Finance Commission under Article 275 of the Constitution of India and not by the State Governments or the Finance Ministers themselves.
"Funds were not discretionary powers of the Government of India but were transferred to the State under rules. We are part of the Union of India and the funds are our right. Taking money from the Union didn’t mean that our dependence was increasing on the Centre’’, he asserted.
He said while non-plan revenue deficit grants have reduced, the share of Central taxes to Jammu has increased. The share of J&K from the Central taxes was Rs 2910 crore in 2010-11, which went up to ` 3691 crore in 2011-12 and was pegged at ` 4244 crore in 2012-13.
He added that the State has recorded 38 per cent hike in tax revenue and 42 per cent increase in Value Added Tax (VAT) during current financial year as compared to the last year.
On Mr Baig’s claim that the State had fixed targets on lower side, Mr Rather said the State was not free to fix the targets on its own. It was the Planning Commission, which had to fix the targets. "During current financial year, year tax collection target was ` 3470 crore but we realized ` 4800 crore, an increase of about ` 1300 crore, which is a history. This is not an easy task. The members should have given credit to us, our officers, our work force’’.
Referring that some MLA’s statement that J&K was falling into debt trap, which was increasing every year, Mr Rather disputed the claims saying the Government of India, Union Finance Ministry and the Finance Commission keep a watch on debts of every State that it shouldn’t exceed the permissible limits. There was a fixed criteria as to how much debt a State can take, he said, adding J&K’s liabilities stood at ` 31,272 crore which included internal debts, loans and advances, insurance money and Provident Fund etc.
On NC MLA Saifullah Mir’s assertion that the State should take debts but ensure development, Mr Rather said J&K was not a sovereign country, which can adopt its own debt policy. It had to work on the policy of the Union Government, he added.
On claim of some MLAs that the budget lacked vision for next 20 years, the Finance Minister said the vision documents were made by the political parties for next years but the budget had to be presented for one year only.
He said Jammu and Kashmir Bank benefited a lot with the return of ` 2300 worth Overdrafts as it invested the amount for welfare of unemployed youth and other sections of the society. The State also benefited as it got ` 1000 crore grant from the Union Government and generated ` 1300 crore from the market at just 8.5 per cent interest as against 17 per cent charged by the J&K Bank. Moreover, he said, ` 1300 crore borrowings and ` 1000 crore grant were not counted in the fiscal deficit.
He said the Bank benefited with return of the amount, which went to the people and led to increase in economic activities. "We saved ` 229 crore worth annual interest on Overdrafts. Every one—be it the bank, the Government and the people—benefited with the return of ` 2300 crore worth ODs to the bank’’.
He said: "we have brought the fiscal deficit down to 4.2 per cent though it would have been okay even at 5.3 per cent. Total debt outstanding was 56.1 per cent of Gross State Domestic Product (GSDP) during 2010-11 but was reduced it to 54 per cent, which was well within the target and the limits of 13th Finance Commission’’.
On the concern expressed by some members over increase in revenue and non plan expenditure, the Finance Minister said soon after taking over the Government in 2009, the State faced the first implication of ` 2000 crore in non-plan amount for implementation of sixth Pay Commission recommendations followed by ` 4200 crore worth arrears, which were being given in installments, and regularization of contractual/adhoc employees. He told the House that implementation of Sixth Pay Commission report and regularization of adhoc employees was the demand of almost the entire House.
Further, the Government had to create 35,000 posts in three years for eight newly created districts, which also put burden on the State exchequer especially the non-plan expenditure.
On Mr Baig’s query that there was no provision in the budget for Seventh Pay Commission, Mr Rather said there were still six years left for the new Commission’s recommendations.
He pointed out that ` 618 crore of the plan were blocked by the Central Government as plan money had been diverted for other purposes by the previous Government. Despite hectic lobbying with the Centre, "we got ` 302 crore only while the rest was cut by the Centre’’.
On the point raised by Mr Baig that Jammu and Kashmir was getting less plan as compared to national level, the Finance Minister said the States like Maharashtra have revenue generation worth ` 32,000 crore as against ` 4800 crore of Jammu and Kashmir. "Such States can contribute their own share in plan. That was the reason that we are behind the plan and got less plan than national average’’.
Mr Rather said the Government has made entire agriculture tax-free. "Is it tokenism as mentioned by some MLAs. If fertilizers prices went up they were not increase by us but due to hike in the prices of petroleum products. We have done for the farmers but we could do by completely exempting fertilizers and other items of VAT’’, he added. He said the Government has also withdrawn 10.5 per cent Service Tax on insurance of crops. Though agriculture land was becoming victim of urbanization, still the growth rate of agriculture has gone up, he asserted.
Referring to the issue of unemployment raised by various MLAs, the Finance Minister said though the Government employment was no solution, the Government has given jobs to 39,000 youth in a year through PSC, SSB and police. The number was in addition to the jobs given under NRHM, ReT and Class-IV posts.
Sher-I-Kashmir Employment and Welfare Programme for Youth (SKEWPY), off banking finance and other schemes have also been launched for welfare of youth. About 800 youth were given subsidy under the banking finance schemes.
On the charges of regional imbalances, he said along with Jhelum, proposals worth crores have also been approved for Tawi river while Chief Minister Omar Abdullah has spoken to Union Forest and Environment Ministry that ` 3 crore grant for Mansar and Surinsar lakes was not enough and should be increased.
Earlier, participating in the 4th day discussion on budget in the Legislative Assembly here today, Congress MLA and former Minister G M Saroori hailed the Government for taking various steps for the development and betterment of people and making Jammu and Kashmir a model and Khushaal State. He thanked the Central Government for doling out ample funds for development of the State.
Mr Saroori demanded regularization of Educational Volunteers (EVs) who have been converted to ReT and daily wagers engaged in various departments and enhancement of honorarium of SPOs, provision of solar lanterns in snow prone and hilly terrains and release of funds under Article 270 and BRGF.
Hailing the budget proposals, Mohammad Sharief Niaz (Congress) pin pointed some lacunas in it and suggested measures for making it more effective. Appreciating the Government for taking measures for the return of Kashmiri Pandit migrants, he pleaded for rehabilitation of migrants of Jammu province also. Mr Niaz advocated for construction of micro and macro hydel power projects and measures to reduce Transmission and Distribution losses. He demanded construction of Grid Station at Kishtwar, enhancement of honorarium of ReT and SPOs, rehabilitation of Gujjar and Bakerwals and provision of funds for development of Gaddi and Sippi community under Tribal Sub Plan.
Rafi Ahmad Mir (PDP) called for strict implementation of decisions taken in the District Development Board (DDB) meetings. He also stressed for the projects in Phase-II and III under PMRP shall be taken up for implementation.
