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| Increase in toll may push up prices of imported items | | | EARLY TIMES REPORT
JAMMU, Mar 12: Despite the fact that the Finance Minister, Abdul Rahim Rather, has not, in his budget proposals that he presented in the state legislature on Friday, imposed any dose of heavy taxes the opposition seems to be still a dissatisfied lot. Based on reports collected from the opposition camp it has become evident that the opposition members expected major relief to people as far as the rural economy is concerned. They expected relief by way of subsidy on fertilisers, pesticides and other practices to boost the sectors of agriculture, horticulture and handicrafts. They even wanted reduction in the toll tax on essential commodities.
But the Finance Minister deserves the credit for not having favoured heavy taxes in spite of the fact that the financial health of Jammu and Kashmir state continued to be frail and fragile. There is no doubt that the scope of imposing fresh taxes in Jammu and Kashmir was very limited because of the adverse impact prolonged militancy had on different sector of economy. One has to take into account the severe impact militancy had on tourism and on export of dry fruit and carpets. If one put together the gains from tourist traffic to the valley and from the export of handicrafts and dry fruit one would feel astonished because these sectors would generate a revenue of over Rs. 5,000 crores a year before the rise of militancy.
Slow growth in the sectors of industry and agriculture had made the state dependent not only on heavy central financial assistance but on heavy imports of various consumer items. In fact in comparison to other states Jammu and Kashmir is on the top of consumer states. It is unfortunate that the state has to import over 65 per cent of foodgrains. As such if Rather has managed to avoid imposing additional taxes it is because of the centre's commitment of allocating liberal financial assistance for the next financial year.
But official sources deny the opposition charge saying that farm implements and other machines used for mechanised farming have been exempted from the VAT and the toll. Similarly fodder, fertilisers, pesticides, weedicides and insecticides have been exempted from toll.
Judged by the number of schemes formulated for the benefit of the unemployed youth and for women who wanted to seek loan for setting up units under the self-employment scheme the Government had no other alternative but to increase the VAT rate from four per cent to five per cent and from 12.5 per cent to 13.5 per cent. Experts say that one per cent increase in the VAT is fully compensated by the VAT exemption granted to several items.
There are, however, fears that the increase of toll from Rs. 40 a quintal to Rs. 50 a quintal may give rise to hike in prices of items imported. Here again a large number of items, as many as 95 out of 100 items, are imported which may be available to the people at higher rates. Here the opposition members are right as they say that when all the central taxes are applicable to Jammu and Kashmir imposing mild taxes by Rather could hardly make things easy for the people in the state. Still Rather deserves the credit for not having increased Re one cess on petrol because already the petrol prices have gone up by over Rs. 3.70 per litre.
Allocating Rs. 2051 crores for the purchase of power is a good step as it may result in easing the power supply. People have been forced to face the ordeal of long load shedding and it is hoped that by earmarking a sizeable amount for power purchase electricity supply may remain uninterrupted for most of the time. Another good decision of Rather is the allocation of Rs. 114 crores for implementing Sher-i-Kashmi0ent and welfare programme for the youth.
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