KL NEWS NETWORK
SRINAGAR
Winding up the discussion on general budget, finance minister Dr Haseeb A Drabu insisted that his budget is aimed at the “reforming” the system that has been violated and decimated in sixty years. He said though he has initiated the process, the “mess” of sixty years cannot be undone in one year.
“You have traditionally heard budgets detailing the increase or decrease in sectors which is part of the budget papers and not the speech,” Drabu said. “I cannot help if you would not read the papers and instead play to the galleries.”
He suggested the Opposition to be reasonable in reaction keeping in mind that “assembly is not Tagore hall and the house is not a theatre.” Pointing towards opposition benches, he said: “If I reveal everything, where will you hide?”
He said the lawmakers who criticized his proposals for various reasons should have been honest enough to attend the sitting and listen.
Drabu said the Economic Survey that lawmakers rarely read – partly because there is nothing much to read about as officials use three year old data, will be tabled in August and it will be a speaking document on the social and economic sectors of the state. “Though I have introduced the economic survey, it requires becoming relevant to what we need to know,” he said.
The minister said that if the lawmakers require the GDP and the growth rate, his budget papers explain that. He put the growth rate jumping from 5% to 13% in last fiscal and now 13.9%. He said the marginal increase in last fiscal might be because of the devastating floods.
Listing the series of initiatives that his budget intends to implement, Drabu said the entire corpus of Rs 14000 crore plus of GP Fund has completely been utilized but is not accounted for in the system.
“This is impossible that the successive finance ministers were not aware of it,” Drabu said. “This was done to reinforce the belief that Kashmir lacks resources and this argument was used to approve more loans in Delhi.” He said he will lift loans for any capital expenditure and not for salaries.
Offering one instance of what his reforms are aimed at, Drabu explained the nexus between the SRTC and the CAPD. He said the CAPD gives contract to SRTC for carriage of food grains and the corporation outsources it to private transporters and retains 65 percent of the freight amount. “You should go on ground and see how this model works,” Drabu said.
“Normally, the cost of carriage is much more than the cost of contract and the result is the food grains are not delivered at all. They are sold in black market,” he added.
Under the existing systems, a contractor has to pay taxes as on date even though the work allotted to him belongs to a different tax regime. This impacts the quality of work because it burdens the contractor. Drabu said though the measure will impact the earnings, he has decided to do away with it. “All the works will be taxed on basis of the era in which it was awarded,” he said.
Maintaining that he will stuck to his earlier argument that J&K needs not to beg, Drabu said the resources available with the state are already enough and it is not a matter of right and no largesse as it has been projected.
Accusing Omar Abdullah of reinforcing the belief that “J&K survives” of alms of Delhi, a sweating Drabu said that J&K is a revenue surplus state. “We had started reforms earlier with a revenue deficit of Rs 390 crore and now many years down the line we have Rs 6000 revenue surplus which means we can spend more without any borrowing.”
Drabu said his problem right now is not the resource but how to spend? For spending Rs 180 crore a day, J&K will have to improve its absorption and spending capacity.
He explained by offering details of the mismatch between macadamization of roads, hot-mix plants and the resources allocated already. “I will be the last person to throw money into bottomless pits, we must have a proper spending mechanism in place,” he said. “At the end of the year after spending Rs 20,000 crore, we all are unable to locate which asset we created and I do not want to continue with that.” He sought patience and support for his reforms to take shape.
The minister said that he is not a person who wants to claim credit for reforms but the fact is that his fiscal architecture that he put in place as economic advisor was continued by the NC-Congress government.
“They made taunts of the zero-deficit and then failed to change it,” he said. At the same time, he said, he disagrees with the Union Finance Ministry’s system of fiscal deficit because it is in the interest of the states to have it in their financial management as it leads to more spending.
“In J&K which is least industrialized and lacks adequate private investment, public investment is key to change,” the minister said. “We have the resources but we need to evolve transparent and accountable systems for increased spending.”
Explaining the “methods of madness” that prevents proper implementation of the poverty alleviation schemes, Drabu said there are a series of BPL lists – one each with CAPD, Rural development, Social welfare, power department and other departments. “Every ministry has its own empire of the poor,” Drabu said. “We are already divided, now even poor are divided as per ministries because in last 60 days no single BPL list was created.”
He said a consolidated BPL list would be available with the state within next six months and that will help target this population for socio-economic change.
Explaining the plight of more than 60 thousand people serving the government in various ad-hoc capacities, the minister read out from a cabinet order that said the people can be appointed without appointment orders.
“We are facing a problem of actually assessing the number of such unfortunate people who have fell victim to this casualization,” the minister said. “Some people think that it is the issue of government but the fact is that it is crisis for the society that government has created.”
Drabu said he will continue with the negative list till he is fairly assured that the industry will not misuse it. The list, in other states, has been used for diversion which J&K cannot afford at a time when it is struggling to restore the systems.
He, however, rolled back additional tax on hosiery and readymade garments, cell phones and on Aviation Fuel required for pilgrim tourism.
The minister insisted that the change in the tax tariff on aviation fuel does not make a change at all because the aircrafts usually fly with full tanks from Delhi only. “Last year, I reduced the tax from 25% to 20% and it made no change in our revenue and now I improved it by 5% and took it to the position it already was,” the minister said. “There is no possibility of any shift in the tourist footfall with this measure.”
The minister said that power continues to be a grey area for state finances and he has initiated certain reforms. I created power bonds and then the Union Government created a scheme on that pattern, the minister said.
He said he is giving free power to BPL families to 30 units a month to ensure metering. He said various schemes already in vogue will help the state to reduce the T&D losses significantly in next few years.
