NEW DELHI/Jammu, January 18 (Scoop News) – Observing that high rates of inflation and weakening of rupee in the international Forex Market, which prevailed throughout the current fiscal, are the continuing causes of worry, the J&K Finance Minister, Abdul Rahim Rather today said that the next financial year is going to bring in the toughest ever economic challenges confronting the nation.
Speaking at the Pre-Budget meeting of Union Finance Minister with the State Finance Ministers held at Vighyan Bhawan, New Delhi today, Rather said slowing down of the national GDP growth rate in comparison to the budgetary projections is another concern in the way of meeting the declared objectives of the Union Government to banish poverty, ignorance and disease from the India as also to curtail its budgetary deficit.
In the backdrop of these major factors in the way of budgetary solutions, Rather while presenting his views on some of the macro economic and fiscal policy issues suggested for selective transfer of various Centrally Sponsored Schemes(CSS) to the states for their merger into state specific plan schemes adding that this step will lessen the fiscal burden on the Union budget to a considerable extent. “The CSS framed by various Union Ministries, though very important from the point of their laid down objectives, tend to centralize the plan process and in many cases, this mechanism inhibits individual states from exercising flexibility in their approach towards problem solving”, Rather said adding that the uniform parameters of these schemes operate harshly in respect of states located in remote corners of the union.
Rather sought continuation of the PPP mode, initiated with emphasis in the 11th Five Year Plan, to accelerate development of public infrastructure, in next year’s budgetary initiatives also to attract additional investments from the local investors as also from abroad. He also called for grabbing the export promotion opportunities, particularly in respect of commodities like handicrafts, consumer goods and surplus food items, which are less dependent on imported inputs, opened due to fall of rupee in comparison to all major currencies like US dollar, pound, euro etc, though temporarily, adding that appropriate budgetary interventions at this stage will boost exports from these sectors, particularly carpets, walnuts and other handicrafts from the states like Jammu and Kashmir and will improve our foreign currency assets. “Tourism is yet another sector which can be given a boost in the backdrop of fall of rupee”, Rather suggested adding that peaceful summer of 2011, which saw a record 12 lakh tourists visiting Kashmir, can be highlighted to turn tourism into a major foreign exchange earner for the country in the next financial year. He also sought for adequate funding for the proposed Rs. 19000 crore railway project for Kashmir during the next year’s budget to ensure its timely completion by the targeted year of 2017. Rather also pleaded for priority funding for timely completion of widening and up-gradation of the National HighwayNH-1A, expansion of Jammu Airport, infrastructure development of international Airport Srinagar and better incentives to the corporate sector.
Rather also urged for transfer of Salal and Uri hydel projects to the state as they had been taken up by the NHPC only for execution and operation and not on ownership basis. “The Hydel Projects executed in the state by NHPC, which have been under the management for a considerably long time should be returned to the state for operation and maintenance”, Rather said adding that we are supported in this initiative by one of the recommendations made by the group constituted by the Prime Minister of India on the economic development of J&K, headed by none other than the Chairman of PM’s Economic Advisory Council, Dr. C. Rangarajan.
He also favoured the demand of all the Himalayan states to enhance the state’s share of free power from the hydel projects under O&M of the CPSUs from the present level of 12% to 25% adding that one percent of power generation should be allocated for local area development as part of their Corporate Social Responsibility.
“Both these measures will considerably add to the state resources and will result into reduction of direct burden on the Union budget to that extent”, Rather maintained.
Rather also urged the need for counter balancing budgetary measures to the Industrial sector to mitigate the increase in cost of Industrial production, which has been one of the main causes of slowing down of the GDP growth rate.