The budget lays thrust on improving agriculture and allied sectors with toll tax and VAT exemption extended to agriculture appliances, fertilizers, fodder etc. The aim is to increase the Gross State Domestic Product (GSDP) share of agriculture from 25% to its erstwhile level of 47% in eighties.
A step forward for Women empowerment in the State, the special feature of the budget is a rebate of 25% in stamp duty in matters of sale and transfer of landed property when in the name of a female member of any family.
Rather also said that from the next financial year a uniform tax regime, Goods & Services Tax, would be introduced throughout the country and for the 2010 year he proposed exemption of VAT and Toll tax on Industry and Tourism. He said a new trade policy is on the anvil favouring more investment and trade activity.
The Minister said the Centre has agreed to restore five telephone links across LoC for making the trade transactions smoother and simpler. He said the State Government is requesting the Centre for making the trade easier and basic infrastructure in this regard is being developed. He said the quantum of trade across LoC is also increasing.
Minister saud in his speech that 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:
2. 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.
3. 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%.
4. 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.
5. 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:
6. 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.
7. 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
8. 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.
Major Economic Infrastructure initiatives:
9. The entire earth work for single lane of Rs.640 crore
10. The government has recently decided to explore PPP possibilities for execution of Rs.400 crore tunnel between Vailoo & Singhpora to provide all weather connectivity between the district of Kishtwar in Jammu Region with the
11. The Qazigund- Khanabal segment of the railway line in
12. Four laning and upgradation of the
13. Completion of Toll Plaza Complex at Lakhanpur is in its final stages and shall get commissioned early in next fiscal. Adequate funding for the same is being arranged.
14. Two Central universities have been approved by the Union government – one each for
15. Urban Transport System for
Broad Budgetary features: revised estimates for the current fiscal (2009-10)
16. As per revised estimates, the current year’s receipts total to Rs.22,885 crore in comparison to Rs.22,739 crore adopted in the budget estimates, up by Rs.146 crore. The tax receipts are estimated at Rs.3,075 crore in comparison to BE of Rs.3,011 crore showing a further improvement of Rs.64 crore. I may mention here that in comparison to last year’s tax revenue of Rs.2,683 crore, the current year’s tax revenue is up by Rs.392 crore, registering an increase of over 14%. The non-tax revenue figures proposed in the RE are Rs.1,294 crore in comparison to budget estimates of Rs.1,219 crore indicating an improvement of Rs.75 crore. The fiscal deficit has been reworked at Rs.2,090 crore in comparison to the figure of Rs.2,081 crore in budget estimates indicating a very small variation of Rs.9 crore.
Expenses on salaries and establishment:
17. As is well known to the Hon’ble Members of this August House, there is a spiralling effect on the cost of establishment because of its big size, implementation of the Sixth Central Pay Commission Award and release of two new installments of DA every year. The total salary expenditure is estimated at Rs.6,629 crore as per revised estimates. The expenditure on pension payment is now estimated at Rs.1,495 crore in the revised estimates.
New Pension Scheme:
18. I had announced introduction of the New Pension Scheme for the employees who would be recruited after 01.01.2010. A Bill incorporating this scheme was passed by this House during the last session. The scheme has come into operation with effect from the first January 2010. The introduction of this scheme and gradual building of a massive Fund outside the annual state budget shall be insulating the employees recruited in future from the regular budgetary pressures of the government on year to year basis. On the other hand, the ever mounting demand of funds for the old pensioners and the existing employees retiring in near future shall be gradually contained in a long-term perspective, indirectly ensuring that the existing employees also continue to get their pensionery benefits and regular monthly pension when they retire.
Budget Estimates 2010-11:
19. I now take up broad budgetary features of the budget for the next financial year. The total budgetary receipts have been kept at Rs.25,984 crore. Out of this, an amount of Rs.22,849 crore is expected as revenue receipts and Rs.3,135 crore as capital receipt. Out of the total expenditure, also estimated at Rs.25,984 crore, the revenue expenditure will be Rs.17,698 crore both on account of plan and non-plan. The total capital expenditure is estimated at Rs.8,286 crore both on account of plan and non-plan.
20. The State’s own revenue comprising of tax revenue, non-tax revenue and share of central taxes totals to Rs.7,873 crore and represents over 30% of the total receipts. Exclusive of our share of central taxes, the state’s own tax & non-tax revenue comes to Rs.4,962 crore which is about 19% of the total budgetary receipts. I have accounted for the non plan revenue deficit grant of Rs.3,940 available under the TFC Award. The inter se breakup of the remaining receipt figures shall be finalized by the Planning Commission at the time of determining the scheme of financing of the next year’s plan. The scheme of financing shall also determine the level of our next year’s loans and market borrowings. For the time being, I have based my assessment of these figures on the pattern of financing of our current year’s plan.
Tax Revenue:
21. The next year’s estimates of tax revenue are Rs.3,655 crore indicating an increase of about 19%. The next year’s estimates of VAT receipts are being placed at Rs.2,611 crore indicating increase of Rs.545 crore over the current year’s BE of Rs.2,066 crore. I am targeting a growth rate of over 26%. Excise revenue target for the next year is Rs.280 crore. The target of collection of taxes on goods & passengers has been kept at Rs.384 crore. Duties on electricity are likely to yield Rs.206 crore. Taxes on vehicles and stamps duties are expected to yield Rs.101 crore and Rs.67 crore respectively.
Non –Tax Revenue:
22. The next year’s budget estimates for non-tax revenue have been kept at Rs.1,307 crore indicating a negligible growth. The main item is power receipt for which next year’s target has been kept at Rs.1,055 crore. Receipts from mining, forestry, water supply and health sectors have been kept at Rs.30 crore, Rs.38 crore, Rs.27 crore and Rs.15 crore respectively.
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