Introduction to Blog

I launched the website and the Blog after having spoken to government officials, political analysts and security experts specializing in South Asian affairs from three continents. The feedback was uniformly consistent. The bottom line is that when Kashmiris are suffering and the world has its own set of priorities, we need to find ways to help each other. We must be realistic, go beyond polemics and demagoguery, and propose innovative ideas that will bring peace, justice and prosperity in all of Jammu and Kashmir.

The author had two reasons to create this blog. First, it was to address the question that was being asked repeatedly, especially, by journalists and other observers in the U.S., U.K., and Canada, inquiring whether the Kashmiri society was concerned about social, cultural and environmental challenges in the valley given that only political upheaval and violence were reported or highlighted by media.

Second, the author has covered the entire spectrum of societal issues and challenges facing Kashmiri people over an 8-year period with the exception of politics given that politics gets all the exposure at the expense of REAL CHALLENGES that will likely result in irreversible degradation in the quality of life and the standard of living for future generations of Kashmiris to come.

The author stopped adding additional material to the Blog once it was felt that most, if not all, concerns, challenges and issues facing the Kashmiri society are cataloged in the Blog. There are over 1900 entries in the Blog and most commentaries include short biographical sketches of authors to bring readers close to the essence of Kashmir. Unfortunately, the 8-year assessment also indicates that neither Kashmiri civil society, nor intellectuals or political leadership have any inclination or enthusiasm in pursuing issues that do not coincide with their vested political agendas. What it means for the future of Kashmiri children and their children is unfathomable. But the evidence is all laid out.

This Blog is a reality check on Kashmir. It is a historical record of how Kashmir lost its way.

Vijay Sazawal, Ph.D.

Saturday, March 13, 2010

State Budget Review

The Early Times conducts a post-mortem of the State budget introduced in the J&K Assembly

Zero deficit Budget, huge reliance on Central funds


Jammu: On the basis of presumptuous figures of receipts and expenditures on various fronts indicating over 70 percent dependence on Central funds, the Finance Minister A R Rather of NC led coalition government in J&K today presented a zero deficit budget for the next financial year-2010-2011 in the state Assembly this morning.

In his second budget presented in the Assembly today, Rather has shown the budgetary receipts at Rs 25,984 cr and likewise the total expenditure has been estimated at Rs 25, 984cr. While an amount of Rs 22,849 cr has been assumed to come as revenue receipts and Rs 3,135 cr as capital receipt, the Finance Minister, in order to have balance on expenditure front has estimated Rs revenue expenditure at Rs 17,698 cr both on account of plan and non plan.The capital expenditure has been estimated at Rs 8,286 cr both on account of plan and non plan in the tentative figures.The Finance Minister however, said even as there is huge dependence on Central funds, the state government would lay thrust on generating additional revenue particularly by way of collecting power tariffs.

In the jugulary of budgetary figures, the Finance Minister has put state's own revenue inclusive of share of central taxes at Rs 7,873 cr which he said represents over 30 percent of the total receipts.In the budget, next year's estimates of tax revenue have been kept at 3,655cr, indicating an increase of about 19% and VAT receipts at Rs 2,611 cr while targeting a growth rate of over 26 %.

For total expenditure of Rs 25,984 cr shown in the budget today , the main chunk of funds have been divided between the annual plan, which the government has assumed to get Rs 6000cr besides PMRP amount at Rs 1,206 cr, centrally sponsored schemes at Rs 850cr and non plan expenditure of Rs 17,928 cr. Yet another intereting aspect of the budgetary proposals in terms of figures is that out of the total plan outlay, the capital expenditure has been estimated at Rs 5,073 cr which forms 84.55 % of the total plan outlay while as the revenue expenditure has been estimated at Rs 927cr forming 15.45 % of the outlay.The Finance Minister has attributed huge increase in the revenue expenditures mainly on account of creation of a large number of plan posts for the new districts in the state.

The realistic figure shown in the budget by AR Rather, about which the government has reasons to feel upbeat is Rs 2911cr - termed as highest ever share in Central taxes given under the 13th Finance Commission Award as against Rs 1880cr given in the year 2009-2010.The central grants have also been shown at a high of Rs 3490 cr as against Rs 2385 cr in 2009-10. The worry for the state government continues to be on the front of Non Plan Revenue Expenditure which consumes 16717 cr of which the government shall have to pay Rs 2251 cr for interest payment. Likewise under Non Plan Capital Expenditure estimated at Rs 1211 cr, Rs 959 cr comprise loan repayment.

While the non plan salaries burden continues at Rs 8179 cr, the pension bill has also soared to Rs 1800 cr as against Rs 1495 cr in 2009-10. A grey area, rather an area of major concern remains the vast gap of revenue and expenditure in power sector where the government has proposed some reforms, thrust being on recoveries of dues and arrears.

In order to balance and fill the gaps of receipts and expenditure, while The finance Minister has not proposed any fresh taxes, the proposals show enhancement in existing tax system of VAT from current 4% to 5%. VAT rate has also been increased in other category by one percent from 12.5 percent to 13.5 percent. Similarly rate of Service Tax will go up from 8 percent to 10 percent, which are bound to impact common masses in more than one way. The government has alsp proposed hike of toll tax from Rs 40 per quintal to Rs 50 per quintal. " It was a compulsion to go for this hike in VAT rates as in order to have uniformity in the structures, the empowered committee of Fiance Ministers has decided to go for such measures", Rather said while justifying the increase after presentation of budget.The toll tax amount has been there for decades and therefore needed some hike, he added.

In what he called as people friendly budget, the Finance Minister has however announced some concessions as well, in terms of exemption of sales tax to those connected with tourism on their income from room rent of hotels, lodges and guest houses for one year.Asserting that the thrust of the government would be on promotion of agriculture and allied sectors, Rather has announced exemption of toll on fodder, fertilizers, pesticides , weedicides and insecticides ."It will give a major relief to the farming community and boost to agri activities ", the Finance Minister said.

The fairer sex have been given some fair deal in today's budget in the sense that a rebate of 25 % in stamp duty inmatters of sale and transfer of landed property has been announced that can happen only when the deals take place only in the name of women members of the family.Also rewarding factor for females in the budget is that special revolving corpus of Rs 10 cr for soft loan has been kept at the disposal of Women's Development Corporation for providing soft loans to girls and women on low interest rates. In the new proposals the Finance Minister also announced that monthly honorarium of Anganwari Workers and Anganwari Helpers has been enhanced by Rs 300 and Rs 200 respectively that will benefit nearly 57000 women folk in the state.

- Per Capita Income works out to Rs 33, 285 registering a growth of 8.54 per cent
- Increase in Uniform Floor Rate (UFR) from 4% to 5%
- Hike in toll tax chargeable by weight from Rs 40 to Rs 50
- Abolition of toll tax on all types of fertilizers including Urea bringing down their rates by Rs 500 per MT
- Rate of service tax chargeable under GST hiked by one per cent
- No VAT would be charged on solar energy equipments, Femian, Guchchi, Gul Banafsha and Anardana
- Estimates of Total Receipts (TR)-Rs 25984 cr as against Rs. 22885 cr in 2009-10
- Estimates of Total Expenditure (TE) also at Rs 25984 cr as against Rs 22885 cr in 2009-10
- Highest ever Share in Central Taxes-Rs 2911 cr under 13th Finance Commission Award as against Rs 1880 cr in 2009-10
- Central Grants also at a high of Rs 3940 cr as against Rs 2385 cr in 2009-10.
- Revenue Receipts (RR) contribute Rs 22849 cr, Capital Receipts Rs. 3135 cr
- Revenue Expenditure (RE) including Security Related Expenditure (SRE) - Rs. 17698 cr, Capital Expenditure (CAPEX) - Rs. 8286
- Non Plan Revenue Expenditure (NPRE) consumes Rs. 16717 cr of which Rs. 2251 cr for interest payment
- Non Plan Capital Expenditure (NPCE) of the order of Rs. 1211 cr of which Rs. 959 cr comprise loans repayment
- Annual Plan 2010-11 size Rs. 7206 cr of which Rs. 1206 cr under Prime Minister's Reconstruction Plan (PMRP)
- Plan Revenue Expenditure (PRE) estimates at Rs. 927 cr. Plan Capital Expenditure (PCE) Rs. 6279 cr and Rs. 850 cr under CSS
- Off-treasury developmental expenditure Rs 3323 cr
- Non-Plan salaries burden at Rs 8179 cr including Rs. 725 cr for DA installments
- Pension bill soars to Rs. 1800 cr as against Rs. 1495 cr in 2009-10
- Rs 8 cr for migrants' group mediclaim insurance
- Rs. 15 cr set apart for 10% Employer's share under New Pension System introduced from January, 2010
- Rs 7.62 cr for strengthening of Regional Rural Banks
- Rs 75 cr in Plan for implementation of Sher-e-Kashmir Employment & Welfare Programme for Youths
- For bringing greater transparency and accountability in implementation of development programme, 150 projects worth Rs. 744 cr assigned to NABCONS and M/S Mckenzy
- Rs 60 cr for meeting cost of VRS/GHS in PSUs
- Provision of Rs 2051 cr for purchase of power from CPSUs and J&K SPDC
- For Media, revision of Advertisement rates done after 2006. Rates enhanced by 40%. Budgetary provisions also increased by Rs. 150 lakh under REs 2009-10 and further by Rs. 245 lakhs in 2010-11
- Completion of all ongoing Health and Educational institutions and making these fully operational by end 2010-11 a major thrust area under Plan
- Rs 30 cr for improving HT/LT network through CD route. Another Rs 20 cr for creation of transformer bank
- Rs 35 cr envisaged for enhancing share capital of State Financial Corporation for its revival. Initial Rs 5 cr provisioned in 2010-11
- Rs. 20 cr for reactivation of worn out and procurement of new water supply pumps
- Plan outlay for Rural Development raised by 82 per cent. Roads Sector gets 51% hike. Social Services receive 45% enhancement. Agriculture Sector's outlay hiked by 28%

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