Budget 2016: Fee waiver for school girls; hike in VAT
STATE TIMES NEWS
SRINAGAR: Jammu and Kashmir government on Monday said it is working out modalities to enable the return of NHPC-run power projects of the state, but did not give any time-frame for the same.
“It (return of power projects) is on the Agenda of Alliance. I have had extensive discussions with people in Delhi. Modalities are being worked out,” state Finance Minister Haseeb Drabu told reporters here after presenting the state budget for 2016-17 in the state legislature.
The Minister said state government has worked out a few modalities with NHPC, but refrained from providing a time-frame for the return of the power projects.
“We have worked out three to four modalities and we will see which one suits (the state) best. I cannot provide the exact date as to when the power projects will be returned to the state as the modalities are being worked out,” he said.
Asked about Union Power Minister Piyush Goyal s statement that the NHPC-run power projects cannot be returned to the state, Drabu said it was Goyal’s view.
He (Goyal) has a view and this is not for the first time that objections have been raised.
“He is a good friend of mine (but) he does not own NHPC.
I can assure you that extensive discussions have happened,” the Finance Minister said.
Earlier, the Finance Minister presented a separate Power Budget in the assembly saying budget deficit of Rs 2,988 crore of the state was only on account of deficit in the power sector which was to the tune of over Rs 3,900 crore.
“We have an unfunded gap of Rs 2,988 crore. The power deficit in financial terms is Rs 3927 crore. In other words, if the power sector financials are taken care of, the State will not have a budgetary gap.
Indeed, it will be a surplus.
“Even worse is that despite incurring such losses, we are not able to provide adequate quantity and appropriate quality of power to our people,” Drabu said.
The finance minister also announced a sop for families living below poverty line (BPL) saying the metered households from this section of the society will be given 30 units free per month and exempt from paying the fixed charges as well.
The minister said while the average per unit cost of electricity supplied to consumers is Rs 7.72, the average sale per unit is Rs 3.64.
At the approved tariff, the average gap or loss comes to Rs 4.18 per unit, or 54 per cent of the cost price per unit comprises of operational inefficiencies and a component of implicit subsidy which is neither directed nor targeted, Drabu said, adding the government would take some measures to reduce the gap by around Rs 2.
Drabu said the reasons for this large and widening gap between power purchase bill and the revenue realisation include low tariffs, high Transport & Distribution (T&D) losses, faulty meters, un-controlled and un-accounted consumption of power beyond the permitted load by the consumers.
Unregistered connections, non-realisation of revenue from non-camp temporary installations of Security Forces, migrant camps, public lighting by the municipal corporations/committees and Government offices are also contributing to the revenue loss.
The minister said reasonable degree of tariff hike from time to time is required to meet the operating costs and to serve the economy with reliable power.
The last tariff hike in the state was in FY 2013-14 when it was raised by 8.5 per cent.
The state government has not increased any tariff for the last two years, while the average cost of supply has grown by about seven per cent, he said.
Drabu said the government is taking steps to move towards tariff rationalisation, identify the barriers in moving towards tariff rationalisation and suitable ways to achieve tariff rationalisation.
Key measures in achieving these would be by introducing efficient tariff design, by including Time of Day rate structure , by administrative interventions, system improvement and consumer metering and by considering measures to reduce reactive energy, he said.
He said for Financial Year 2016-17, tariff petition has already been filed with State Electricity Regulatory Authority envisaging the proposals on above lines.
Without passing inefficiencies of the system to any category of consumer in the State, the Power Development Department (JKPDD) in its tariff petition before State Electricity Regularity Commission (SERC) has proposed to recover the prudent cost of supply from various categories of consumers by bringing the high-end categories like State/Central Government departments, public street lighting, public water works at par with the prudent cost of supply.
The corresponding budgetary provisions shall be provided to respective departments, he said.
The minister said another proposal to recover the prudent cost of supply from the consumer categories like domestic, non-domestic agriculture and industrial would be by giving a reasonable tariff hike. By giving a reasonable tariff hike to the consumer categories like domestic, non-domestic agriculture and industrial without any tariff shock to these categories.
The remaining cost up to the prudent level is proposed be claimed as direct subsidy from the concerned department for the respective categories, he said.
Drabu said in order to ensure transparent accounting, bring efficiencies in the system and to appropriately target subsidies to various categories of consumers, covering the gap between the prudent cost of supply and the tariff proposed for various categories of consumers who are presently below the prudent level, the Government proposes to build in and provide direct subsidy to the consumer through the JKPDD.
Earlier, unveiling a Rs 64,669 crore budget for 2016-17, the Jammu and Kashmir government announced a slew of measures for women, including a fee waiver for girls in government schools, while a number of things including mobiles, garments and packed food would turn costlier.
Finance Minister Haseeb Drabu also announced for women four police stations across the state and a dedicated city bus service in Srinagar and Jammu, while reserving 10 per cent area in industrial estates for their enterprises.
On taxation front, he proposed to hike VAT by 1 per cent on items including cell phones, tablets and iPads, imitation jewellery, readymade garments, hosiery goods, packed frozen food, juices and ready-to-serve food.
Besides, all online purchases would be subjected to an entry tax, as against an earlier threshold limit of Rs 5,000, while an entertainment duty of Rs 50 per connection will be levied a month on satellite and cable TV operators.
The aviation turbine fuel levy will go up from 20 to 25 per cent, while the toll levied on vehicles will also go up. At the same time, Drabu proposed to exempt from VAT the lodging services provided by hotels and guest houses, as also for carpets and agriculture produce. The budget estimates envisage a deficit of nearly Rs 3,000 crore as the revenue receipts are expected to be to the tune of Rs 61,681 crore during the current fiscal.
“This fiscal the total receipts are estimated at Rs 61,681 crore. Of these 51,460 crore are revenues and Rs 10,221 crore in the form of borrowings. The state’s own revenues are estimated to be Rs 23,737 crore while Rs 9,500 crore will come from the state’s share in central taxes.
“In addition to this Rs 27,721 crore are to flow as other central transfers,” Drabu said in his Budget speech.
The budget presentation, which was earlier scheduled to be held on January 18, had to be deferred in the wake of death of the then Chief Minister Mufti Mohammad Sayeed on January 7.
Giving details of the Budget estimates, Drabu said Rs 19,694 crore will be the capital expenditure while Rs 44,975 crore will be the revenue expenditure.
“What these large numbers mean is that we are spending Rs 2.50 in order to be able to spend Re 1.00 on development. To reduce this ratio from 2.5:1 and at least bring it at par with the development spend is the first big challenge.
“We have made a good beginning in this budget. But the road ahead is difficult as salaries and pensions…account for more than Rs 23,000 crore which is more than the development expenditure in the year,” he added.
Drabu said the state had got a large development expenditure this year in view of the Rs 6,000 crore from the Rs 80,000 crore Prime Minister’s Development Plan announced last year. The highlight of budget was the women-specific measures which includes waiving fees for all girl children studying in government run schools up to 12th standard.
“In deference to our first woman Chief Minister (Mehbooba Mufti), I am introducing some gender specific budgeting initiatives. I propose the government waive…the fee of all girl students in the state government run educational institutions up to the higher secondary level,” Drabu said.
He also proposed that 10 per cent area in all industrial estates of the state will be reserved for women entrepreneurs, subject to the condition that if it is transferred, it shall be to an enterprise which is incorporated in the name of a woman and has women as the majority shareholders.
“I am proposing to set up two Entrepreneur Development Centre to be set up at Srinagar and Jammu to help, guide and train aspiring women entrepreneurs,” he said.
Drabu also announced setting up of four new women police stations at Pulwama, Kupwara, Kathua and Udhampur.
The budget also has provision of Rs 5 crore for starting a dedicated city bus service for women in Srinagar and Jammu.
“I am making a provision to provide exclusive women toilets in all state, district and sub district hospitals,” he added.
The finance minister announced hike in certain taxes including a 1 per cent increase in levy on all items which were earlier charged at 13.5 per cent under the VAT regime.
The list of items falling in this list has also been expanded to include cell phones, tablets, I-pads and accessories, imitation jewellery, readymade garments and hosiery goods. It also would include all types of packed, frozen food, juices and ready to serve food.
All online purchases made in the state will now be levied entry tax as the budget proposes to do away with the earlier threshold limit of Rs 5,000.
“The online purchases by the consumers are increasing day by day and the practice to purchase goods and services by splitting the value into bills of less than Rs 5,000 is rampant. This puts local retailers to disadvantage as the same goods and services sold by them are costlier being loaded with tax,” Drabu said.
The budget proposes to extend the exemption on essential commodities, remission to local industry from payment of VAT, exemption on CST to industrial units, exemption from toll on raw material and finished products of industrial units and exemption to lodging services provided by hotels, lodges and guest houses.
Drabu also included carpet and agriculture produce under the exemption category. All types of cotton and yarn, handmade and handloom carpets were placed in the zero tax category.
VAT will not be levied on agricultural implements like threshers, tillers and harvesters while tax exemption is proposed to be extended on rodenticides and herbicides.
The automobiles sold at CSD canteens to the members of the Armed Forces have been placed in the 5 per cent rate of tax instead of earlier 13.5 per cent.
The VAT on parts of bicycles, tricycles, tyres and tubes of cycle rickshaws has also been put in 5 per cent category.
Rs 2K cr scheme for PoK refugees submitted to Centre
Srinagar: Jammu and Kashmir government has submitted a Rs 2,000 crore-scheme for rehabilitation of displaced persons of Pakistan-occupied Kashmir and Chamb to the Centre.
“For the displaced persons of PoK and Chamb, necessary scheme has been drawn up by the state government and submitted to the central government for approval and release of financial assistance of Rs 2,000 crore for its onward distribution among the identified 36,348 families,” state Finance Minister Haseeb Drabu said in his budget speech in the Legislative Assembly. He said the cash assistance to migrants of Jammu province has been also recently enhanced and brought at par with Kashmiri migrants with effect from November 18 last year. PTI
Welfare fund for journalists
Srinagar: Jammu and Kashmir government on Monday proposed to set up a journalist welfare fund with an initial corpus of Rs two crore for providing financial help to working and accredited scribes in the state.
The legal heirs or dependents of working journalist will be provided assistance from the fund in case of death or incapacitation of the scribe concerned, state Finance Minister Haseeb Drabu said in his budget speech in Legislative Assembly.
“I propose to set up a Journalist Welfare Fund with initial corpus money of Rs 2 crore for the welfare of working and accredited journalists of the state,” he said.
“For last 26 years, journalists working in strife-torn state of Jammu and Kashmir are facing hardship as there is no welfare scheme for scribes,” Drabu said.
“It would be ideal if the journalists of the state get together and set up a society, frame the rules and guidelines for administering this fund,” he said.
Rs 1 lakh each for police stations as investigation cost
Srinagar: Police stations in Jammu and Kashmir will now get Rs one lakh each to cover expenses of investigating cases.
“I propose to allocate Rs One lakh each in favour of all the 193 police stations of the state as ‘cost of investigation’. Having the legitimate financial resource will certainly uplift the image of police stations in the minds of common masses,” state’s Finance Minister Haseeb Drabu said in his budget speech in the state assembly here on Monday.
Drabu said the police stations had never been provided any specific financial resources to meet routine expenditure for investigating crimes.
“Even as we speak, no police station, the primary interface with the citizens for resolution of law-and-order issues, has ever been provided any specific financial resources to meet the routine expenditure such as the cost of investigation of the crimes. This includes basic things like petrol or stationary,” he said.
He said the CAG had pointed out that from 2009-10 to 2013-14, allotment of fuel to district police stations for running their police vehicles was virtually non-existent.
“Such is the inefficiency of the system, that one-third of the fuel quota was being consumed in to and fro journeys by vehicles from police stations to petrol pumps located at the district headquarters.
“With this kind of a setup, the SHO has nowhere but to look for manna from heaven. This has often resulted in the perception of police station and its personnel being corrupt,” he said.
Drabu said budgetary announcements in the past had sometimes led to inappropriate, unethical behaviour and petty corruption.
“It may not be inappropriate to say that at times unethical behaviour and petty corruption has been a consequence, undoubtedly an unintended one, of budgetary announcements,” he said.
Citing an example of austerity drive of few years ago, Drabu said the big cut that Finance Department enforced was on tea served in offices.
“The tea never actually stopped but its financing changed. The tea that Ministers and officers had was paid, if whispers in the secretariat are to be believed, from faking printer cartridge bills. “This to me sanctifies unethical behaviour and breeds corruption at the lowest level and the system not only condones it but also internalizes it as acceptable behavior,” he added.
