Uphill task for Kashmir''s first professionally-qualified finance minister
The PDP-BJP coalition government in Jammu and Kashmir faces its first major financial challenge as it braces up to present the annual budget in the assembly session starting Wednesday and though economist Haseeb Drabu is the state`s first professionally qualified finance minister, his task is far from easy, say experts.
Jammu: The PDP-BJP coalition government in Jammu and Kashmir faces its first major financial challenge as it braces up to present the annual budget in the assembly session starting Wednesday and though economist Haseeb Drabu is the state`s first professionally qualified finance minister, his task is far from easy, say experts.
"The total revenue of the state including central devolution by way of share in taxes etc would be in the vicinity of around Rs.18,000 crore for the fiscal 2015-2016, and Jammu and Kashmir is likely to have an annual budget of Rs.50,000 crore in 2015-2016," Shakeel Qalandar, a local industrialist and member of civil society, told IANS.
"On the other hand, our salary and pension bill for government employees would shoot up to Rs. 20,000 crore, the expenditure on electricity would be around Rs.5,000 crore out of which our revenue in this sector would be around Rs.2,000 crore leaving a cash loss of Rs.3,000 crore which needs to be addressed," he added.
Qalandar said Drabu`s biggest challenge would be generation of revenue from state`s own resources, addressing the growing unemployment and to achieve the balance of trade.
"We import goods worth Rs.4,500 crore annually. The finance minister has two options to achieve the balance of trade. This can be done by increasing exports through productive investment since curbing imports, the other option, might not be commercially prudent.
"The finance minister cannot impose fresh taxes for revenue generation since the people of the state are already taxed to the optimum. Imposing fresh taxes would not be wise in the backdrop of the people`s suffering due to last year`s unprecedented floods," Qalandar said.
He, however, strongly defended Drabu`s concept of a zero deficit budget which the finance minister`s adversaries in the opposition National Conference have labeled as "mere jugglery of figures".
"Drabu`s concept of a zero deficit budget does not just mean bridging the gap between income and expenditure. His basic concept of a zero deficit budget means not to carry forward liabilities in terms of fund allocation for projects/schemes not completed in time - as has been fiscal practice for five decades in the state.
"This practice always resulted in cost overheads besides creating additional liabilities on the state. The minister believes schemes to be completed in a certain fiscal should not be carried forward.
"This is Drabu`s conception of a zero deficit budget which has perhaps been misunderstood. Technically speaking, otherwise all budgets are zero deficit budgets because no budget can leave a gap between income and expenditure," he contended.
The other problem for the state is the plan holiday which will happen in the next two years because the Planning Commission is being wound up.
"Whatever central funding will come, will be through the Finance Commission allocations, but the fact is that in future even the centrally sponsored schemes will have to be funded for most of their financial component by the states," said retired senior banker Noor Muhammad Wani.
He said the Finance Commission has recommended Rs.59,666 crore as grant in aid for the state during the next five years.
"Through this route, Jammu and Kashmir will get Rs.9892 crores during 2015-2016.
"The NITI Aayog is a policy think-tank that will not discharge the duties of the outgoing planning commission.
"The challenges for the finance minister are, therefore, multi-layered. Since he is an economist, expectations run high among traders, industrialists, unemployed youths and above all the common man.
"The proof of pudding would lie in its eating and not in the powerful profile of the finance minister. Hopefully, he will deliver", Wani asserted.