Srinagar, Mar 15: On the consecutive third time since 2020, J&K’s annual Budget was presented and concurred in the Lok Sabha on Tuesday with Finance Minister Nirmala Sitharaman projecting it as a growth oriented budget, while a few MPs questioned a lack of debate on the proposals and the Lok Sabha assuming the role of J&K’s legislature.
Ziraat Times here provides a brief analysis of some of the key features of the budget:
Overall, the scant details available suggest that there are no new taxes introduced, nor has there been any change in the existing tax slabs.
While the budget looks like a normal income-expenditure statement, with education and security expenditures consuming the highest budget pies, the core expectation among people in J&K about the budget giving a fillip to job creation here remains largely unfulfilled.
There re no major proposals related to agriculture sector. Nor is there any consideration for the looming risks from climate change, which requires specific budgetary allocation both for research on impact and mitigation measures.
J&K’s 2022-23 Budget has been pegged at Rs 1.13 core, marking an increase of over Rs 4000 crore from the previous budget of Rs 1.08 crore.
The budget estimates J&K’s economy to grow at 7.5 percent, maintaining a growth momentum despite occasional shocks, but fiscal deficit still stands at on a much higher side – Rs 9570 crore, which is one of the highest among states across the country. Moreover, the tax/Gross Domestic Product (GDP) ratio of Jammu and Kashmir for 2022-23 has been projected at 8.18 percent which is just higher than previous year’s 8.17 percent.
Continuing with the past trend, revenue expenditure (Government expenses) proportion remains high in comparison to the capital expenditure – out of Rs 1,12,950 crore , Rs 71,615 crore will be used for revenue expenditure and Rs 41,335 crore on capital expenditure (development purposes). Ms Sitharaman said that 37 percent of the earmarked budget will be spent on infrastructure development projects.
The scant details available as of now suggest that there are no new taxes introduced in this budget, considering the fact that no Additional Resources Mobilizations (ARMs) have been reported.
Finance Minister Nirmala Sithraman said that J&K’s debt/GDP ratio for 2022-23 is estimated at 50.84 percent, which is quite worrying and perhaps the highest for any large state in the country. While the quantum of GDP for 2022-23 has been projected at Rs 2,03,716 crore, which suggests a decent growth, J&K’s GDP per capita still remains on the lower side.
While own revenues of Jammu and Kashmir (both tax and non-tax) are estimated to be Rs 25,314 crore, the statutory central transfers – which is J&K’s share from the central tax pool as mandated by the constitution- is not specified. If the Rs 35,581 crore earmarked as “Central assistance”, that means J&K’s reliance on central grants to fund part of its budget requirements remains high. The Rs 29,750 crore under Centrally Sponsored Schemes/Prime Minister’s Development Package sounds a good amount, provided it is spent efficiently with a results-based and not output-based aproach.
The fact that Rs 200 crore have been earmarked for capitalization of J&K Bank suggests that the government shareholding in the bank would continue to rise, elbowing out private investors, and moving towards complete nationalisation of the Bank.
Even as the Finance Minister announced that the Elevated Light Metro Rail in Srinagar and Jammu cities is expected to be rolled out in 2022-23, there is no specific budget allocation mentioned in the details available as of now. The project, as per the initial project proposal, is expected to be a financed one, which might even suggest a build-own-operate-transfer modality by the development company.
While in principle the earmarking Rs 150 crores for creation of new Industrial Estates is a good move, this administration must ensure that natural environmental safeguards are not compromised, visiting J&K’s fragile ecology and environment.
The proposal of establishing 500 Kindergartens in government schools is a good one and could help in extending early childhood care and development to children of households who cannot afford expensive kindergarten education.
While the budget has a provision of Rs 400 crore for CRIF roads, Rs 2400 crore for PMGSY roads, Rs 1000 cr for NABARD scheme, the Rs 28 crore for Mughal road still is quite insufficient to make it a reliable alternative road for connecting Kashmir and Jammu provinces. A lack of reliable road connectivity remains the biggest hurdle to economic development in J&K, and would require a major funding push, backed by a sound technical plan that goes beyond digging mountains and creating more unstable mountain slopes.
The provision of Rs 70 crore for new circuits including Mansar, Surinsar & Sufi circuits besides construction of Water Parks in twin cities of Srinagar and Jammu sounds a good one. However, the poor road conditions of the established tourist spots require a robust investment. More importantly, J&K now needs a plan to preserve the aesthetic beauty of the place, which is getting ruined day by day for the highly haphazard and concrete constructions sans any aesthetic considerations.
The Government has listed four major sectors for revenue and capital expenditure of the total budget.
In capital expenditure i.e. development, the Government proposed Rs 2387 crore for Administrative Sector of which 52 percent is expected to be incurred on the Home Department. Rs 4716 crore have been proposed for Social Sector, 31 percent of which is likely for the Health and Medical Education Department. Rs 26,146 crore were earmarked for infrastructure sector with 31 percent proposed for Public Health Engineering Department while Rs 8085 crore will be spent in economic sector of which 57 percent will be used on Rural Development Department.
In Revenue Expenditure i.e. the Government expenses, the total budget proposed for Administrative Sector is Rs 13,216 crore. Again 73 percent of this is expected to be incurred on Home Department. Rs 23060 crore were allocated for Social Sector, of which, 47 percent is expected to be used on Education Department.
Education Department got highest Rs 11,832 crore followed by Rs 10,831 crore for Home Department. Rs 200 crore have been provisioned in the budget as Development Fund for 20 District Development Councils (Rs 10 cr for each DDC) and Rs 71.25 crore for Block Development Councils (BDCs) (Rs 25 lakh each). A total of Rs 1313 crore have been kept for Panchayati Raj Institutions (PRIs) and Urban Local Bodies (ULBs).
JMC and SMC will get City Grants of Rs 100 crore while Rs 200 crore have been kept for Smart City projects. Rs 373 crore will be given for Dal Nageen lake Development and Conservation.
Similarly, the revenue receipts will be to the tune of Rs 1,02,322 crore and capital receipts at Rs 10,628 crore.
Total revenue budget of infrastructure sector was pegged at Rs 29583 crore and 62 percent of it will be spent through the Finance Department. In economic sector, the Government has proposed revenue budget of Rs 5756 crore with 29 percent to be incurred on Forest department.
Concerns about a lack of debate
Congress member Manish Tewari and RSP member N K Premachandran objected to the motion moved by Sitharaman, alleging it was in violation of the rules of procedure of the House.
“Some rules are beyond the amending powers of the House,” Tewari, a Congress member from Anandpur Sahib, said.
Minister of State for Parliamentary Affairs Arjun Ram Meghwal said the discussion will take place after two hours.
Rajendra Agarwal, who was in the Chair, said the business for the day was approved by Speaker Om Birla during the Business Advisory Committee meeting.
Premachandran, the member from Kollam, said the Minister had also sought a discussion on the budget proposals and the supplementary demand for grants together, which would go against the rules.
Tewari and Premachandran sought a ruling from the Speaker Om Birla on the issue.
As the House re-assembled in the post-lunch session, Sitharaman said the then UPA Government had presented and discussed the Budget for NCT of Delhi in 2014 on the same day.
“That time the Chair allowed it, and this time also the Chair may kindly allow, it is my appeal,” Sitharaman said.
BJD member Bhratruhari Mahtab, who was in the chair, noted the Speaker had rejected the contention of Tewari and Premachandran, saying that the supplementary demands for grants for J&K presented in Lok Sabha were for the 2021-22 and could be taken up together with the Budget for 2022-23.
