Sanjeev Pargal
JAMMU, Mar 11: Finance Minister AR Rather today dispelled impression created by the Opposition during three days marathon debate on general budget for 2013-14 that the State Government’s dependence was constantly growing on the Government of India and declared that the State has made agriculture items completely toll and tax free.
In his 83 minutes reply to the budget debate in which 32 MLAs including former Deputy Chief Minister and Finance Minister Muzaffar Hussain Baig took part in the Legislative Assembly, Mr Rather admitted that the Government was finding it difficult to bear Rs 3874 crore worth power purchase bill as against just Rs 1460 crore of revenue during current financial year. The Government would definitely seek an explanation from the Power Development Department (PDD) officials as to why they could muster only Rs 1460 crore worth revenue as against Rs 2300 crore target given to them.
The Finance Minister gave point to point reply to charges made by Mr Baig on financial scenario of the State including remarks in the report of Comptroller and Auditor General of India. Instead, he read out various paragraphs from the latest CAG report in which the Auditor General has appreciated financial position of the State.
Mr Rather announced increase in honorarium of Panchs to Rs 1000 per month as against Rs 600 proposed in the budget.
“There has been consensus in the House that honorarium of Panchs shall be increased. I am conceding their demand and proposing it to Rs 1000 per month instead of budgetary proposal of Rs 600 per month. The honorarium of Sarpanchs would stay at Rs 2000 per month’’, Mr Rather said quoting the figures of Punjab, Haryana, Punjab and Himachal Pradesh where Sarpanchs were being paid between Rs 300 to Rs 2000 per month and Panchs from zero to Rs 600.
“In Uttar Pradesh, the Sarpanchs were paid Rs 300 per month and Panchs nothing. In Rajasthan, it was Rs 125 for Sarpanchs and Rs 100 for Panchs while in Himachal Pradesh it was Rs 1000 for Sarpanchs and Rs 125 for Panchs. Punjab was paying Rs 1200 to Sarpanchs. We had taken the highest figure of Haryana, which was paying Rs 2000 to Sarpanchs and Rs 600 to Panchs. Still on the call of Opposition members, we have increased Panchs honorarium to Rs 1000’’, he said, adding it would further put pressure on non-plan expenditure, which was already burdened with salaries and pensions projected to go up to Rs 17000 crore in the next financial year.
Quoting figures, Mr Rather said out of total budget for 2012-13 (current financial year) worth Rs 33,141 crore including plan and non-plan amount, the Central assistance amounted to Rs 10,479 crore (31.68 per cent) while the State’s contribution was Rs 22,643 crore, which comes out at around 68.23 per cent.
“Whatever we got from the Union Government is our Constitutional and legitimate right. The Central assistance in 2012-13 budget i.e. the current financial year has been worked out at only 31.68 per cent only while rest of the amount is the State’s own share. The amount nowhere indicated that the State was largely becoming dependent on the Government of India’’, Mr Rather said.
He added: “the Central Government had to give amount to the States in the form of annual plan, Centrally Sponsored Schemes and the share from taxes collected from the State by various Central Departments including the Income Tax. That is just and genuine right of all the States’’.
Pointing out that the State has projected Rs 8000 crore worth annual plan for 2013-14 as against Rs 7300 crore for the current year, a step-up of 10 per cent and received Rs 44,000 crore under 12th five year plan as against Rs 26,700 crore during 11th five year plan, the Finance Minister told the House that after every five years, the President of India had to appoint a Finance Commission to devise a formula on distribution of funds between Centre and State Governments.
“The Finance Commission had to decide grant-in-aid to the States including Panchayati Raj Institutions, Urban Local Bodies and many other institutions. That money is our right. That is a Constitutional provision. We are legitimately entitled to this provision. This in no way indicated the State’s dependence on the Centre’’, he asserted.
Taking part in the budget debate, some of the Opposition MLAs had pointed out that the State has very few resources of its own and was increasingly becoming dependent on the Centre for the funding.
Voicing concern over Rs 2400 crore worth approximate revenue deficit in power purchase bill during the current financial year, Mr Rather told the House that the State would be purchasing Rs 3874 crore worth power but getting only Rs 1460 crore worth revenue.
He said the Government had given a target of Rs 2300 crore worth revenue realization to the PDD and added that it would be asking the Department officials as to why they failed in meeting the target. However, he told the Opposition members that power revenue was just Rs 592 crore in 2007-08, the last financial year of previous Government while in 2012-13 it would go up to Rs 1460 crore.
Mr Rather declared that the Government has directed its all Departments to clear the power due to the PDD and, in future, keep a provision from the budget allocated to them for making payment of power bill. “No Government Department should allow the arrears of electricity charges to pile up’’, he said, adding “this would be applicable on private consumers also, who must pay electricity charges regularly’’.
The Finance Minister disclosed that the Government was getting examined the major projects from three agencies to ensure that they were executed properly and timely.
“We have introduced third party monitoring by NABCONS, which has monitored 107 projects, of which, 87 projects were in progress. In addition to NABCONS, the Chief Minister’s Monitoring Cell has monitored 92 projects while Result Framework Document (RFD) has checked 33 Departments’’, he said, adding the Planning Commission of India has also appreciated third party monitoring started by the State Government. He added that under the new system every Department has to explain use of funds and show results.
On Mr Baig’s charges in which he had quoted the CAG report, Mr Rather said majority of expenditure of plan was incurred in the fourth and last quarter of the financial year as works taken up in the month of April, August or September reached the completion time in March.
Not agreeing that 60 per cent funds are spent in March, he said during 2004-05 when Mr Baig was himself the Finance Minister, only 44 per cent funds had been utilised till December while in 2007-08, the amount was 42 per cent. In 2011-12, the expenditure during first three quarters was 40 per cent.
On slow pace of on some of the developmental projects including hospitals, the Finance Minister said Rs 1504 crore were required for 228 ongoing works for their completion in the current financial year but “we had the budgetary provision of Rs 102 crore only’’. Definitely, he admitted, with this pace the projects would take a long time to complete “but this is the fact’’. He said this had been the case in the past also otherwise, some of the hospitals awaiting construction since nineties would have been completed during the PDP regime.
Mr Rather said the State Government would take up with Union Minister for Health and Family Welfare Ghulam Nabi Azad for one time grant to complete ongoing health projects. “If we are not going to get the grant now, we are not going to get it ever’’, he said noting that Health Minister Shabir Khan immediately after taking over charge of the Department had met Mr Azad seeking financial help for the ongoing hospitals.
On the issue raised by PDP MLA Peerzada Mansoor Shah that like Rs 333 crore budgetary provision for some of the projects in Jammu, a similar provision should have been kept for the Kashmir Valley also, Mr Rather clarified that Rs 333 crore was not meant for upcoming financial year but was total cost of the projects.
Asserting that Jammu was in heart of the Government, he said the train was going to reach Katra this year. Moreover, the tunnel would bypass tourist resorts of Patnitop, Kud and Batote. Therefore, something had to be done for development of these tourist resorts. He said Rs 280 crore worth projects have been taken up for Srinagar outside the plan. “We are determined to give equal treatment to all three regions of the State’’, he added.
On the charges leveled by Mr Baig quoting CAG report that some Department had shown excess expenditure while others had surrendered the funds, Mr Rather said sometimes re-appropriation of the funds was done.
“The Departments didn’t surrender the amount but the funds are diverted to other Departments. Though this is a normal process, the CAG showed the funds as diverted and surrendered’’, he added and warned that the Government officials found spending even a Re 1 excess than the budgetary proposals would lose their job. However, he said, so far their had been no example before him where the Departments exceeded the budgetary proposal.
On another charge of Mr Baig that there had been no accountability of Rs 76,000 crore worth funds, Mr Rather said the State got Rs 26,000 crore plan during past five years and asked: “how can there be no accountability of Rs 76,000 crore?’’
Launching a counter attack, Mr Rather said the CAG had pointed out excess expenditure of Rs 9770 crore during 2003-04 and Rs 12,954 crore worth excess payment without budgetary provisions in 2005-06 while Utilisation Certifications of 2004-05 were shown as pending. During all these years, Mr Baig was the Finance Minister.
As Mr Baig repeatedly interrupted the Finance Minister, Mr Rather charged that he (Mr Baig) was getting restive.
Mr Rather read from the draft report of Auditor General of India on the State finances ending 31st March 2012. However, as soon as he started reading the paragraphs, Mr Baig objected to it saying the report hasn’t been tabled in the Assembly so far and, therefore, the Finance Minister can’t read its paragraphs.
However, Speaker Mubarak Gul allowed Mr Rather to read the paragraphs saying the paragraphs would be tabled in the House.
The paragraphs, read by Mr Rather in the House, said: “the State has made good use of opportunities presented by the increasing economic activity 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 have shown very high growth. It is to the credit of the Government that the State’s dependence on non-debt resources from the Central Government (as %age of total expenditure) has come down from 67% in 2006-07 to 63% in 2011-12. CAG has said that even as concerns remained about delay in completion of ongoing projects, the State Government’s capital expenditure has registered significant and steady increase.
“Likewise, it has been appreciated that the State’s switchover to Government Banking with RBI with effect from 01.04.2011 after liquidating its entire overdraft with J&K Bank as on 31.03.2011 with Special Central Assistance in the form of Grant-in-aid of Rs. 1000 crore. During 2011-12, the interest burden on overdraft/ways and means advances came down by over Rs. 220 crore as a result of this switchover to new banking arrangement’’.
The CAG report, Mr Rather said, has also patted the State for taking significant decisions like introduction of National Pension Scheme(NPS) bringing more items under the ambit of VAT, some services under tax net, computerization of Commercial Taxes Department to be completed by 2013 and a host of other institutional and sectoral reform measures. The arrears in the accounts of PSU’s are being liquidated, the CAG report added.
Mr Rather said that the economic growth has been consistently showing an upward trend since the last four years, which was a matter of great satisfaction. He said that the State’s Gross State Domestic Product (GSDP), which was only Rs. 42,315 crore at current prices during 2008-09, is expected to rise to Rs. 76,115 crore in the current fiscal.
He added that over the last year’s figure of Rs. 65,979 crore, the growth rate at current prices worked out at 15.36%. He said the corresponding GSDP figures at constant prices are Rs. 34,664 crore for the year 2008-09 and Rs. 43,628 crore for the current fiscal, which reflected the growth rate at constant prices over the last year’s figure of Rs. 40,771 crore at 7.01%. This is higher than the national average, he pointed out
The Finance Minister said that the 13th Finance Commission has given a target to gradually cut down the fiscal deficit year wise which has been achieved by the State successfully and satisfactorily.
“In 2010-11 the fiscal deficit was 4.32 per cent while it has been restricted to 4.54 per cent during the last fiscal,’’ he said, adding that as per the new series of constant prices (base 2004-05), these figures have further improved to 4.15 per cent and 4.29 per cent respectively.
“The position has been fully explained in the Economic survey and there is no contradiction anywhere. He displayed a booklet of Central Statistical Organisation (CSO), which prescribed the methodology for calculating GSDP and offered to give it to Mr Baig and all members of the Assembly for their study to understand the whole process.
“Likewise, the per capita income of the State in 2008-09 was to the tune of Rs 30,212 which rose to Rs 44, 533 in last year and is estimated at Rs 50,806 in the current fiscal. At constant prices, the State’s per capita income rose to Rs 29,215 last year in comparison to Rs 25,641 in 2008-09. For the current financial year, the per capita income is estimated to rise to Rs 30,889” at constant prices, Mr. Rather added.
He said Fiscal Responsibility and Budget Management (FR&BM) Act at the State level and the CSO at the national level are the most reliable guiding institutions to bring in and measure fiscal discipline, adding that it was a matter of great satisfaction that under their guidance, the State’s finances are marching forward in a right direction. He said J&K is one of the few States in the country where fiscal deficit has been contained as per the prescribed targets.
The Finance Minister said that a new hydle policy has been announced in 2011 to facilitate construction of new power projects and contain Transmission and Distribution losses.
About employment, he said that the Government was committed to provide over 70,000 – 80,000 jobs in Government sector during next two years adding that around 50,000 youth were recruited in the State during last four years.
However, he admitted that the Government jobs alone cannot solve the problem of unemployment as the volume of educated unemployed youth is very huge. He said Government announced SKWEPY, Seed Capital Fund scheme, Youth Start up Loan Scheme, UDAAN and Himayat schemes to train the youth so that they are able to put up their own income generating units.
About fiscal discipline, Mr Rather said that every treasury officer has been asked to maintain the budget control register to check that no excess withdrawals take place. He said not a single complaint about excess withdrawal at any treasury of the State has come to his notice during the last four years. He said CAG has in its latest report appreciated the measures taken by the State to ensure fiscal discipline and budget management.
He assured the members that appropriate provision will be made in the budget for bad pockets adding that this step has been taken by him.
Mr Rather announced that the Government has almost made the agriculture sector tax free. He said it was imperative to develop infrastructure for the post harvest management of fruit so that it reached to the terminal Mandis in fresh condition and with original flavour. He gave out figures to assert that Agriculture Sector has grown by 11.66% in current year at current prices and 3.84% at constant prices and that its growth is better than the growth rate of last year.
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