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| Zero deficit, incentives for girl child, widows, industries, smart cities; VAT exemption on essential commodities | | Dr Drabu's Rs 46,473 crore budget | | 
Syed Junaid Hashmi
Early Times Report
JAMMU, Mar 22: Ex-Journalist and ex-Chairman of Jammu and Kashmir Bank Dr. Haseeb Drabu in his new avatar as Finance Minister today presented first budget of the PDP-BJP coalition government with slew of schemes for farmers, traders, women and employees.
Apart from marking a significant shift from this old practice of plan and non-plan budget, Drabu in his budget for 2015-16 proposed abolition of water tax, cash stipends for young girls and continuing VAT remission to industries till uniform GST comes into force in the country. Presenting the proposals on Sunday, Finance Minister Haseeb Drabu said the Rs.46, 473 crore-expenditure budgets also proposes development of Jammu and Srinagar cities as smart cities in the state. He proposed abolition of the archaic water tax, setting up of modern looms for carpet weavers, floating of Dal development bonds for preservation of the world-famous Dal Lake in the state and payment of Rs.1,000 monthly to a girl child from birth till she attains the age of 14. He said that the Dal development bonds would be available for investment to non-locals as well. Drabu also proposed allowing chartered aircraft to fly in tourists from Delhi to overcome high costs of tickets during peak tourist season.
For industrial purchases, the budget proposes a cashless system of VAT remission with budgetary support for revival of sick industrial units in the state. Drabu also announced waiving off 50 percent of the Kissan Credit Card (KCC) loans for the smallest and most vulnerable farmers who have an outstanding balance of less than Rs. 1 lakh, for this purpose Rs. 150 crore are earmarked. He also announced introduction of Gold, Silver and Bronze Cards for certain categories of registered dealers, so as to recognize traders of repute.
He talked of exploring the possibility of getting J&K declared as an area where all bank lending would classify as priority sector lending. Drabu said that he has been pursuing this with the Governor of Reserve Bank of India Raghuram Rajan while adding that if this happens, it would not only increase the amount of bank lending in Jammu and Kashmir (J&K) but would also reduce the lending rates by 300 to 400 basis points.
Stating that price rise in the essentialities of life is the major concern of the common man, Drabu said that the commodities like, Paddy, Rice, Wheat, Pulses, Floor, Atta, Maida, Suji and Besan are consumed by most of the people particularly the ones belonging to weaker section. He said that the present exemption on these commodities is expiring on March 31, 2015 and hence, he proposed to continue with these items in the zero percent tax rate under the J&K VAT Act, 2005 for the benefit of common man as also the domestic tourists for another year.
Drabu also announced exemption of toll on the export of fresh vegetables but said that toll would continue on the import of vegetables. Drabu extended the concession of VAT remission to the local industry by another year i.e. upto March 31, 2016. Drabu talked about the vestige of license control raj. He said that there are many negative lists in the state; the two main ones being the negative list for VAT remissions and the negative list for toll on raw materials.
He claimed that the items on the negative list are arbitrary and have no economic or business logic while adding that not only do they cause distortions, they also provide the environment for both wholesale and retail corruption. Drabu said that vested business interests get their items put on the negative list and at operational level; it gives the authority to seek gratifications. He maintained that there should be no negative list to VAT remissions, be it general or industry specific. He proposed to do away with the negative list with the rolling out of the new industrial policy on July 1, 2015.
He clarified that the existing Industrial Policy, with all its incentives and remissions will remain in force till June 30, 2015. He further said that tax on Aluminium foil as packaging material is proposed to be reduced from 13.5 percent to 5 percent. "Tree Spray Oil" has been placed as an agriculture product @ zero percent tax rate. He announced exemption of baby diapers, adult diapers and female sanitary napkins from VAT.
He announced placing of Almonds and its kernels in zero per cent tax rate, on the analogy of walnut and walnut kernels. Drabu proposed business process re-engineering, financial restructuring and administrative reorganization of the ailing Public Sector Enterprises (PSEs). He said that the first step in this direction will be to draw PSEs out of the ambit of different administrative departments and bring them under one administrative basket for holistic corporatization and restructuring.
He further said that all public enterprises will be classified into two groups, financial and non-financial, and held in two holding companies. Once the re-engineering is complete, divestment will be done at the level of the holding companies. The J&K Bank, in which the state government has a majority stake and The J&K Power Development Corporation (J&K PDC) shall be kept outside the ambit of this restructuring.
Drabu clearly said that the first step in the process of financial restructuring is that the budgetary support provided by the State Government to these PSEs over the years shall be converted into equity capital and accepted standard of accounting and audit shall be put in place. He said that government would begin with the State Motor Garages (SMG).
Drabu talked about implementing the GPS tracking of all commercial and public service vehicles. This system will cover vehicles of JKSRTC as well as other vehicles moving ration. He said that this will lead to much more real-time tracking of food grain movement as well as stopping pilferages. Drabu further said that the system is intended to improve the road safety for citizens through effective monitoring by transport department and traffic police. He said that the cooperative movement offers opportunities to the people to form their cooperatives in gainful commercial activities for earning their livelihood in a socially inclusive manner.
The finance minister further said that efforts are on to bring other citizen based services under the e-governance programme. He said that the government has recommended Jammu and Srinagar cities for the inclusion under Smart Cities Mission besides recommending inclusion of Anantnag and Katra Town in the smart city mission as both these towns are gateway to the two important religions destination namely Amaranth Shrine and Mata Vaishno Devi Shrine.
Drabu announced that state government will implement full suite of e-Panchayat solution in J&K imaginatively through Panchayati Raj department to bring transparency and radically transforming grass root governance in the state. Drabu further proposed to contribute Rs. 1000 per month on behalf of every new born girl child for the next 14 years and on reaching 21 years she would receive around Rs. 6.5 lakhs. To begin with, Drabu said that this would be done as a pilot project in six districts with the most adverse child sex ratio.
He added that even if we cover one third of this population, i.e. 30,000 girls across six districts, the total annual outgo would be Rs. 35 crore. Accordingly, he proposed this amount and hoped that it will be continued for the next 14 years for every girl child born after April 1, 2015, in six districts of the state exhibiting low and declining child sex ratio. Drabu proposed succour to 50,000 widows and destitute women of the state by projecting Rs. 100 crore for this purpose in the form of insurance cum saving scheme.
He said that this scheme would be called "Aasra", and will have benefits which include zero balance saving account, life insurance of Rs. 25,000, an accident cover of Rs. 25,000 sickness and disease cover of Rs. 5000 and maturity/survival benefits of Rs. 25,000 after five years. he further said that only widows or destitute women with no source of income shall be entitled to the benefits of the scheme. He said that National Family Benefit Scheme provides one-time assistance of Rs. 20,000 to those BPL families whose sole bread winner dies while the scheme being proposed by him would include an equivalent share of Rs. 20,000 every year. |
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