JK Finance Minister Haseeb Drabu presents budget; 7th Pay Commission, DA and mediclaim for employees

Jammu, January 11: Jammu Kashmir Finance Minister Haseeb Drabu on Thursday presented this year’s budget of Rs 80,313 crore in the state Legislative Assembly that covered increased minimum wages of unskilled workers, Handicraft Development, hike in Dearness Allowance for employees, to implement 7th Pay Commission Recommendations, employees would now get full pensionary benefits etc. 

Notably, Jammu and Kashmir is the first Indian state that is presenting the budget for 2018-19 in the first half of the last quarter of the current fiscal. However, the central government’s budget will be disclosed later in this month.

While presenting his 4^th budget, Minister Haseeb Drabu said, “The Budget that I am going to lay on the table of the House today is the culmination of sustained work in building new systems for public expenditure management. Over the last three years, we have made concerted and coordinated efforts to overhaul the style and substance of financial management of the state.”

The State Finance Minister said, “The journey which started off with macroeconomic stabilization, has been complemented by structural reform and followed by systemic changes. All these reforms, which are sequential and interconnected, took time but are necessary to undertake. They have now set the stage for meaningful public policy interventions.”

“While the destination of an adequately funded, transparent and sustainable system of financing socio-economic development is still far, I can assure you that we have traversed quite a distance on the right path. I am happy to inform the House that all the systematic changes been made so far have started paying off. I can see some green shoots of fiscal order,” he added.

The Highlights of Budget presented by JK Finance Minister Haseeb Drabu are as follows:

• Fiscal deficit which was previously estimated at around 9.5 percent has actually turned out to be around 5.7 percent.
• The minimum wages of unskilled workers were raised from Rs. 150 to Rs. 225, while those of skilled labour to Rs. 350 from Rs. 225. A new category of highly skilled worker was introduced and Rs. 400 was fixed as the minimum wage.
• The strict discipline of no re-appropriation after December 31st, 2017 has resulted in more than 50 percent of the outlays being spent by December 31st, 2017.
• The State Government will provide Rs 5 crore each to the Handicraft Development and Handloom Development Corporations for raw material and inventory upgradation.
• SRTC is up for focussed attention and in the course of this year, it shall be our endeavour to strengthen its balance sheet and clear off its liabilities before showcasing it for a public-private partnership while retaining majority control.
• The State Government announced the release of 1 percent Dearness Allowance due to the employees from 1st July 2017.
• The State Government is committed to implement 7th Pay Commission Recommendations from April 1, 2018, which will be effective from 1st January 2016.
• The Government recently reduced the eligibility for a full pension from 33 years of qualifying service to 20 years of qualifying service, benefitting more than half of the number of employees on the rolls.
• Unmarried daughters of the employees, who were hitherto not entitled to receive a pension, have now been made eligible to receive pension once the employee and his/her spouse is no more.
• The State Government proposed to enhance the Deposit Linked Insurance of GP Fund subscribers from Rs.10 lakh to Rs.50 lakh. Similar Scheme shall be framed for the employees covered under NPS.
• Government has increased the Personal Accidental Insurance from Rs.5.00 lakh to Rs.10.00 lakhs.
• The State Government have worked out an "Assured Career Progression Scheme" for all the Gazetted cadres of engineering departments.
• The State Government have worked out an "Assured Career Progression Scheme" for all the Gazetted cadres of engineering departments.
• The State Government proposed to extend benefit of Assured Career Progression to other technical cadres like Agriculture, Horticulture, Animal & Sheep Husbandry etc.
• Government will consider providing an alternate incentive in lieu of CST to the industrial units in the State.
• The State Government shall also provide freight subsidy to the industrial units located in the State and transporting their manufactured goods beyond 1000 km outside the state.
• The State Government shall make an available refund of SGST to all the industrial units, which were hitherto eligible for VAT exemption.
• The State Government decided to treat hotels and resorts at par with the industries as far as payment of power tariff is concerned. From 1st April 2018, they will now have to pay the same power tariff as is applicable to the Industries.
• The State Government have decided to roll out a "CM's Business Interest Relief Scheme". For all the RBI approved restructured accounts, the Government will contribute one-third of the total interest payment of all these borrowers.
• The State Government proposed to grant one-time waiver of Rs. 147.23 lakh on soft loans provided under erstwhile Prime Minister’s Package in respect of 19 Houseboat owners, who had taken such loans from Banks other than J&K Bank and SBI.
• The State Government proposed to grant a waiver of penalty and interest on arrears of tax in respect of all the dealers registered under the provisions of J&K Value Added Tax, 2005 and J&K General Sales Tax Act, 1962.
• The State Government have decided to waive off interest and penalty on all the power arrears owed to the Government by the industrialists and hoteliers and tourist resort owners.
• Under Amnesty Scheme for the transport sector, the State Government is waiving off interest and penalty on past arrears of token and passenger tax from 1st July 2016 to 31st March 2017.
• Education loans available from banks have the repayments deferred till completion of course, the interest during the moratorium period is back-breaking for most of the students.
• The State Government also proposed that more trades having entry qualification as 8th pass, both under NCVT/SCVT norms, be introduced.
• The State Government proposed every transgender shall be treated as living under BPL unless indicated otherwise.
• The State Government proposed free life and medical insurance cover and a monthly sustenance pension on the pattern of old age pension scheme for all transgender people above the age of 60 who are registered with the social welfare department.
• The State Government proposed to support the creation of a Common Facility Centre for Cricket Bat Industry at Sethar, Anantnag by making an attractive public-private partnership offer.
• The State Government decided to facilitate setting up of walnut processing units in the private sector through an enabling interest subvention scheme.
• The State Government had estimated unfunded resource gap of over Rs. 3,000 cr. But had surplus of over Rs. 1,300 crore. Fiscal deficit was estimated at around 9.5% but has actually turned out to be around 5.7% an improvement of nearly 400 basis points.
• Revised estimates for the current year are much better than the estimates presented last year! Tax revenues were estimated to be Rs. 9,931 crore. These have been exceeded and in the process, we have crossed the Rs.10,000 crore mark of own tax collection.
• Providing regular engagement for the casual, adhoc and others is more about the ability to take socially relevant and meaningful decisions on the back of a better-managed expenditure system. Good finance is not an end in itself, it is a means to a social and humanitarian end.
• The State Government proposed a small initiative of setting up of a community-based marketing network to encourage saffron growers to go back to the traditional system of cultivation, for which it earmarked Rs. 5 crore.
• The State Government proposed to set aside a sum of Rs.25 crore to finance orchard re-plantation/ high-density plantation initiative.
• In the interim, till scheme to facilitate private players to establish more CA stores in the State is designed and operationalized, a scheme for the hiring of CA stores in areas adjacent to NCR by horticulture dept for use of apple growers of state.
• The State Government proposed setting up of a Jammu and Kashmir Renewal Energy Corporation which will catalyze the development of renewable energy resources.
• The State Government proposed a capital infusion of Rs. 255 crore in Anantnag Central Cooperative Bank, Baramulla Central Cooperative Bank, and Jammu Central Cooperative Bank.
• The State Government have decided to set up a Disaster Mitigation Fund with an initial corpus of Rs. 10 crores.
• Government is required to constitute a State Finance Commission in terms of the Jammu and Kashmir State Finance Commission for Panchayats and Municipalities Act, 2011.
• A committee of officers and professionals in the area of taxation and industry has been constituted to work out the framework for bringing real estate, electricity, alcohol and Petroleum a JK GST.
• The State Government is very keen to bring electricity under the ambit of our GST. The reason being that under GST Input Tax Credit can be availed for electricity. This will boost the industrial sector and also encourage investment in power projects in the State.
• When CM Mufti-led government took over there was a liability of more than Rs. 11,000 crores. Today, the departmental liabilities have come down to Rs. 600 crore or so of works done and power purchase liabilities have been reduced to a little more than Rs. 3,000 crore.
• The State Government has received excellent cooperation from employees. There has never been a situation of discord between us. To express gratitude to all the employees, the State Government is announcing the release of 1 percent Dearness Allowance due to the employees from 1st July 2017.
• Pay Committee constituted to recommend the revised pay structures for the State Government employees shall also, side by side, examine the various anomalies in different departments and try to address them during the course of implementation of 7th Pay Revision.
• JK’s Accredited journalists to be covered under Mediclaim Group Insurance Scheme.
• The State Government have decided to do away with a toll on vegetables, medicines, sugar, salt, tea, soaps/detergents, sanitary items, water coconut, wheat seeds, tree spray oil, newsprint, Jaggery (Gur).
• The State Government proposed the abolition of a basic toll on all non-commercial, private light motor vehicles.
• The State Government have decided to abolish toll on the export of all types of fruits produced within the State.
• The State Government also proposed an incentive for SMEs & industrial units to get themselves listed at SME Exchange & others in the country to raise capital through IPOs/other market tools. I make an initial budgetary provision of Rs. 1.00 crore and will provide additional money if required.
• The State Government with an aim to extend relief to the general commuters/ transporters, I have decided to abolish Lower Munda and Heerpur Toll Posts.