Budget 2010-11

Kashmir Life reproduces the J&K Budget 2010-11 presented in the legislative assembly by the finance minister Abdul Rahim Rather on Friday, March 13 2010.

Hon’ble Speaker,


J&K finance minister AR Rather presenting yearly budget in the state assembly.
J&K finance minister AR Rather presenting yearly budget in the state assembly.

 It is indeed a rare privilege for me to present my second budget before this august House within the same financial year with the gap of only seven months. This may be too short a period for assessing the full impact of the budgetary measures announced by me during the last session. However, I will present the positive trends emanating from the measures effectively carried forward by the coalition government headed by our young & dynamic Chief Minister, Janab Omar Abdullah Sahib. These trends will indicate that the government is on the corrective path of fiscal management and economic development. I will be circulating details of action taken report on my last budgetary announcements alongwith the annual financial statements.

Economic Scenario:

I have already presented the Economic Survey Report to hon’ble members of this House. Because of the long gap in between the last day of sitting of the House and today, I couldn’t lay this report earlier though it was ready with me. The preliminary estimates given in this Report place the State GSDP for the current financial year at    Rs.38,298 crore in comparison to last year’s figure of Rs.34,805 crore indicating a growth rate of 10.03%. At constant prices, the GSDP works out to Rs.26,153 crore. This indicates a growth rate of 6.87% which is higher than the growth rate registered last year.

The per capita gross income works out to Rs.33,285 at current prices and Rs.22,730 at constant prices. The last year’s per capita income figure at current prices was Rs.30,665. Thus the per capita income has registered a growth of 8.54%.

A notable feature of these figures is that while the national GDP growth rate is being estimated at around 7.5% for the current fiscal – down from the last 5 years average of 8%, there is considerable improvement in current year’s GSDP growth rate in our case. This is despite the fact that our exports have suffered for the second year in succession due to global economic meltdown and also that the agricultural production has been hit by inadequate rainfall during the last kharief and by delayed rains during the current rabi season.

As per preliminary estimates, the primary sector has contributed 24.60% to our GSDP. Secondary sector has contributed 29.60% and the share of the tertiary sector has been 45.80%. As will be seen, the contribution of the primary sector comprising of agricultural and allied activities has slipped down from 25.82% registered last year. The secondary sector comprising of industry and manufacturing activities has improved from the last year’s figure of 28.29%. There is a marginal lowering of contribution from the tertiary sector comprising of services from its last year’s share of 45.89%. I may point out here that during the last 20 years counted from 1980-81, the share of primary sector has come down from the level of 47.40%. The secondary sector has substantially gained from 12.90% and the tertiary sector improved from 39.70%. While the shares of the secondary and tertiary sectors have improved because of growing number of manufacturing and service units, there is stagnancy in primary sector. This stagnancy calls for our fullest attention for possible interventions and corrections.

Thirteenth Finance Commission Award

Hon’ble members may kindly recall that we had made very elaborate, extensive and intensive efforts for presenting our state’s case before the Thirteenth Finance Commission. The Commission appreciated our memorandum as one of the most comprehensive documents touching upon all the relevant issues and its Terms of Reference. During its visit to our State, the Commission held very detailed discussions with the Council of Ministers and various other stake-holders. The Members of the Commission visited all the three regions of the State to have first hand account of development issues and further interacted with various stake-holders locally. For the first time, we had arranged special meetings of the Commission with the representatives of all the political parties and some honorable members of this House. As per our information, all parties, individuals and groups made very effective and strong presentations before the Commission. I am really very happy to say that our joint efforts have yielded adequate dividends.

The Award of the Thirteenth Finance Commission has been laid by the Union government before the Parliament on 25th February, 2010. The Report reveals that the Commission has been particularly considerate in appreciating the needs of our State and, therefore, there are enough reasons to thank the Commission for their Award. Firstly, as against our share of 1.297% in the central taxes recommended by the previous Commission, the present Commission has enhanced our share to 1.551%. As a result of this enhancement, our share during the next financial year is estimated to increase to Rs.2,911 crore as against Rs.1,880 crore available during the current financial year. For the full period of the Award, we are likely to receive Rs.20,183 crore on this account, as compared to the amount of only Rs.7,442 crore available under the previous Award. This indicates a jump of 171%. The actual devolution shall be related to the actual realizations of taxes by the Union government. Secondly, the non-plan revenue deficit grant for the next five years has been increased to Rs.15,936 crore as against Rs.12,353 crore available under the  previous Award indicating an increase of 29%. Thirdly, in addition to the enhancement of the provision for Natural Calamities Relief by 155%, the Commission has also recommended specific needs grants of Rs.135 crore for Kashmir and Rs.120 crore for Jammu. For the first time, Rs.90 crore has been specifically allocated for Ladakh region as strongly advocated by the government. Fourthly, the Commission has also recommended a grant of Rs.1,000 crore for settling the state government’s over draft with the J&K Bank. In totality, the Award of the Thirteenth Finance Commission works out to Rs.40,439 crore which is almost double of Rs.20,880 crore made available to us by the previous Commission.

We have noticed that the specific needs grants and some other sector specific components of the last Award were not utilized fully. This has resulted into great financial loss to the State as the un-utilized portion lapses at the end of the Award period. There are various stipulations attached to the release of such grants such as preparation of detailed plans of action, project reports, proper sanction by the prescribed committees at the Centre and periodical submission of progress reports and utilization certificates in a time bound manner.  In order to ensure 100% utilization of the grants awarded by the Thirteenth Finance Commission, the government shall constitute a High Level Empowered Committee headed by the Chief Secretary to monitor the progress of expenditure on all the relevant items. A Finance Commission Cell in the Department of Finance shall keep regular tab on the periodical progress registered by the concerned departments. Each department shall also make comprehensive quarterly review of the physical and financial progress and apprise hon’ble Chief Minister about such progress.


Please enter your comment!
Please enter your name here