Budget 2011-12: New Initiatives

Aushadh Vaatika

solarHerbal medicines and herbal cosmetics are back in demand globally. The market is growing very fast. The profitability in the Industry manufacturing herbal medicines and herbal cosmetics is also very high. This phenomenon has generated an increased demand for herbs and aromatic plants which are now being cultivated at commercial scale. High yields are expected to farmers who take to cultivation of such herbs and aromatic plants.

The Jammu and Kashmir has been traditionally known for many of the herbs which have been naturally growing in the forests. Visualizing great potential of employment of our youth in this sector, the government has initiated the first step in this direction by taking up commercial production on a pilot basis through the Forest Department who have the necessary technical know how and expertise on the subject.

The Forest Department has developed an herbal garden or Aushadh Vaatika at Jammu and a similar herbal garden is being developed at Srinagar. These herbal gardens are intended to function as a role model for establishing similar herbal gardens throughout the State in the private sector as tremendous potential exists in our State for commercial cultivation of herbs and aromatic plants. Based on the input which is likely to become available from the Forest Department, detailed project  report  shall  be  prepared very soon to encourage our un-employed youth as well as the existing farmers to take to herbal gardens as a wide spread economic activity. The requisite financial, administrative and technical support shall be provided by the government on the lines of Floriculture farms which are already being established successfully under the existing schemes.

Bijli Adalat

power-3It is a well known fact that the government is heavily losing revenue in power sector. The government is already seized of the problem of much lower recovery as against very heavy cost of energy supplied to the consumers.  Arrears on account of unrecovered energy charges have been piling up. The government proposes to adopt tough measures against willful defaulters and energy thieves.

On the other hand there are many bonafide consumers who have not been able to clear their liabilities because of pending disputes regarding the billed amounts, meter readings or the calculation of surcharge. Presently, there is no consumer friendly system for quick, satisfactory and on the spot resolution of such disputes. Bijli Adalats are functioning in many States for on the spot resolution of such disputes and spontaneous collection of arrears. The government proposes to set up similar Bijli Adalats in the State from the next year. I urge all the bonafide consumers to come forward and actively participate in these Bijli Adalats and take full benefits of the scheme.

Open Access Power Purchase Scheme

The J&K Electricity Act 2010 enables the government to promote open access power purchase approach for consumers. Under this provision, a bulk consumer can approach an outside supplier of electrical energy to meet his demands, with the permission of and under a proper agreement with the Transmission Utility which, in our case, is the State Power Development Department. The Transmission Utility is entitled to levy charges on its transmission services as determined by the State Regulator. The arrangement would be beneficial to both the government and the concerned consumers. The government proposes to start implementing this Scheme from the next financial year on a pilot basis.

Energy Conservation

Solar Power equipments like solar lanterns, solar water heaters, solar street lights are in high demand. However, their high costs are not affordable for every one. The Ministry of Non-Conventional and Renewable Energy is supplying solar panels and equipments at highly subsidized prices to the individuals belonging to the BPL category and living in the remote and backward areas. It is also installing solar equipments in public buildings like hospitals, educational institutions and cultural complexes of our State. There is a demand from several segments of our society for approving a proper scheme under which they can start harnessing solar energy. This demand requires some in-depth interactions with the prospective users and the Ministry of Non-Conventional and Renewable Energy Sources. In order to flag this issue for an early resolution, I propose to ear-mark a provision of   Rs 2 crore in the next year’s budget.

Administration of Stamps Tax Act

One of the important sources of our revenue is Stamps Duty. However, it is felt that the actual amount of revenue from Stamp Duty and sale of stamps is far below its potential for the reason of the vendors of immovable properties and the vendees showing the consideration for sales much below the actual exchange price. Such mal-practices not only promote generation of black money, they also cause huge loss to the State Exchequer. On the other hand, genuine buyers of immoveable properties who are willing to pay the market price in white money, are put in a quandary while the land mafia manages to grab such properties at throw away prices with the help of their black money.

The 50% reduction in the rates of the Stamp Duty ordered by the government has not produced the desired result. The zonal rates earlier notified by the Divisional Commissioners had run into legal difficulties. Recently, the government has got fresh notifications of the zonal rates issued by the two Divisional Commissioners and the government is closely monitoring the progress of implementation of these fresh notifications.

However, on consideration of all the relevant aspects of this problem and also learning from the experience of other states who are collecting appreciable amounts from the levy of Stamp Duty, the government proposes to effect comprehensive changes in the existing system of registration and assessment of stamps duties and also to bring many other monetary transactions in its ambit. An exclusive organization for administration of Stamps Duties and Registration on the pattern followed in other States is also need of the hour. To meet all these objectives, the government proposes to introduce a comprehensive Bill for consideration of this August House during the current session.

Computerization of VAT administration

An IT project costing Rs 40.49 crore on computerization and management of VAT has been inaugurated by the Hon’ble Chief Minister Janab Omar Abdullah Sahib on the 22nd December 2010. The Web Portal of the department has been commissioned and it carries all the Acts, Rules, Regulations, Notifications and other information relevant to tax administration, for use by the public in general and the dealers in particular. By the Ist April 2011, on line facilities of filing tax returns, depositing the amount of tax, filing of check post declarations, applications for CST Forms and facilities of correspondence with the department shall become available on 24×7 basis. The complete IT based system is expected to be rolled out in the entire State including the two Divisional Offices of the Department, all the 45 Commercial Tax Circles and the 11 check posts by June 2011. This IT enabled system will revolutionize the transparency and the speed of working of the Department.  Frequent visits of the dealers to various offices of the Commercial Taxes Department for attending to routine matters shall become avoidable and un-necessary.

It has been further decided to install CCTVs and web cameras at all the important public interface points of the Department to ensure more effective supervision over the working at all these places.

Computerization of Toll Plaza

Lakhanpora-postAfter completion of the Toll Plaza complex at Lakhanpur, our attention shall now be focused on complete computerization of data regarding movement of vehicles through the toll post, classification of all goods carried, computation of the Toll payable and its speedy collection. I have directed the Excise Department to immediately work out a proper Information Technology based project for this purpose which will be implemented on priority basis.

Computerization of government treasuries

On the initiative of the government, the National Informatics Centre (NIC) has prepared a detailed project report on “Treasury Mission Mode Project” under the national e-governance plan. We propose to take full advantage of this scheme and computerize all our treasuries which will then get linked on line to all the State government departments, Planning Commission, Central Ministries, J&K Bank and the Accountant General on e-network to bring in high speed in transactions, automatic compilation of accounts and total transparency into the system of budgetary expenditure control, revenue monitoring and reconciliation of accounts etc. This project is expected to cost around Rs 26 crore.

Arrears of Pay Revision

Honourable Members are already aware of the all out efforts made by the Government in the last two years to accommodate the demands of the employees relating to the Sixth Central Pay Commission Report. Apart from fully implementing the new pay scales and Grade Pay, the Government has also been sanctioning DA instalments at the rates applicable to the Central government employees. Additionally, in a very special gesture, the rates of HRA are being brought at par with the Central government from July 2011 even though the State needed a reverse policy to encourage postings in the rural areas. The minimum length of service required to enable the employees to qualify for full pension has been reduced to 28 years even though the age of entry into Government service in our State remains very high. These measures have resulted into spiralling of the revenue expenditure on account of salaries and pensions, as briefly mentioned by me while giving the figures of expenditure on salaries and pensions.

At the time of arriving at a settlement with the representatives of the government employees, it was agreed that the payment of arrears of pay revision would be considered by the Government after the requisite additional resources become available for the same. The total amount of arrears amounts to approximately Rs 4,300 crore.  Payment of such a huge amount was well beyond the State’s financial capacity. In fact, many of the other States who have adopted the Central scales of pay, have not, as yet paid such arrears to their employees and have indeed not given many of the Central allowances. Despite the aforementioned agreement and continuing financial difficulties, the Government once again displayed an employee friendly approach and approved a road map for payment of 50% of the arrears of pay revision to its employees and pensioners. A Government Order stands issued accordingly. This amount shall be paid in varying number of instalments by credit to their GPF Accounts. The estimated expenditure on the first instalment payable during the year 2011-12 is Rs 525 crore.

It is hoped that the employees will appreciate the position and respond by rendering sincere, honest and dedicated services to the public for which the Government exists.

Despite our financial difficulties, I would like to announce a small improvement in the agreed road map in respect of our senior citizens. As per the road map, the pensioners are to receive 50%  of their arrears in three or more annual instalments. I propose to pay off these arrears in just one instalment to such of the pensioners who shall attain the age of 90 years or above on 1st April 2011. Similarly, the pensioners in the age group of 80 to 90 years on 1st April 2011 shall be paid these arrears in two annual installments.

DA installment of the government employees

An installment of DA payable @ 10% had become due with effect from the 1st July 2010. The government has decided to release this installment retrospectively with effect from its due date. The employees shall draw the amount of enhanced DA along with their pay for the month of April 2011. The arrears from 1st July 2010 up to 31st March 2011 shall be credited into their GPF Accounts.

Increase of 10% in DA shall also be sanctioned in favour of the pensioners who would get their arrears in cash during the next financial year. The total financial implication on account of this instalment of DA for employees and pensioners shall be Rs 700 crore annually. Besides, additional  Rs 500 crore shall be involved in payment of arrears.

State Financial Corporation

The State Financial Corporation is being brought on a revival path. It has made a record recovery of Rs 21 crore in the current financial year. In order to fully revive this organization and to boost its lending activities, the government proposes to contribute additional share capital of Rs 20 crore to the J&K SFC in the coming years, so as to enable the organization to re-start playing its key role in supporting industry, enterprises and other economic activities in the State. Honourable Chief Minister has sought the intervention of the Honourable Prime Minister for one time central assistance of Rs 101 crore to give effect to the recommendations of the Prime Minister’s Task Force on MSME, including revival of J&K SFC.

Hike In Stipend

The trainees receiving training in the centres run by various departments receive monthly stipend at varying rates which have not been revised for many years. This is one of the reasons due to which the trainees do not find it attractive enough to join these training centres which are operating at much below their intake capacity. In particular, this phenomenon is depriving our traditional handicraft and handloom sectors from induction of younger blood. There are 553 handicrafts centers and 100 handloom centers with intake capacity of about 16,000. It is proposed to increase the present stipend rate of Rs 100/- per month to Rs 500 per month in case of elementary training centres and from             Rs 200 to Rs 700 per month in case of advanced training centres. The trainees receiving training in other fields, in the centres run by various government departments and presently in receipt of Rs 100 in case of elementary training and Rs 200 per month in case of advanced training, shall also be given similar benefits.

Austerity Measures

I had announced imposition of austerity measures in the spending of government departments during my first budget. These measures have been continued in the current year.      I have decided to continue them in the next  financial year also.

Instructions have been issued to the subordinate authorities to stop re-appropriation of funds at their own level. The system of obtaining Administrative Approval before commencement of works shall be strengthened and strictly enforced. The complaints of allotment of works by any officer without inviting tenders shall be strictly dealt with under rules and the guilty shall be duly punished.

In order to recover long pending government dues from defaulting parties, the legal cases shall be methodically followed. Senior lawyers from the relevant fields, such as taxation shall be engaged to contest such cases.


Despite the government’s keen desire to get selections against available vacancies expedited, vacancies always remain unfilled with the departments. As calculation of vacancies periodically is a dynamic exercise, this problem pervades. On the other hand, our youth which is anxious to compete in the selection process for such vacancies feels dissatisfied with such delays.

The government is examining the possibilities of inducting a larger number of employees in a stipendiary mode, as in the case of Rehbar-e-Taleem Scheme, so that an appropriate number of our youth is duly selected in advance, in a transparent and objective manner, through a fair process of selection and remains available to be absorbed in regular government jobs after a prescribed period. The modalities of this scheme are being worked out so that the same is adopted for implementation from the next financial year.


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