Jehlum Post News | Jammu | Mar 5, 2012 | Finance Minister, Mr. Abdul Rahim Rather today presented zero deficit Annual budget for 2012-13 in the Jammu and Kashmir Legislative Assembly.J&K ASSEMBLY-2012.In his about 80 minutes long budget speech, Mr. Rather said that during the next year’s budgetary proposals the main emphasis has been on to accelerate the momentum generated so far in the process of socio-economic and welfare of the people adding that the ultimate aim is to bring the major indexes of development of our state at par with All India averages.The current financial year has been witness to the consolidation of peace and order in our state. The number of tourists, who visited Kashmir Valley and Ladakh region and pilgrims to Shri Mata Vaishno Devi Shrine and Shri Amaranth Ji Yatra has surpassed all the previous records. These numbers signify the growing confidence of the visitors in the persistent  efforts and capability of the government in restoring peace and order. A new era of peace and prosperity for our people has truly begun. The improved  environment has also helped us in a more effective implementation of our plan schemes and budgetary programmes of socio-economic development.The Eleventh Five Year Plan is concluding on 31st March 2012. The next financial year shall be the first year of the Twelfth Five Year Plan. The Planning Commission of India is engaged in the process of finalizing its Twelfth Five Year Plan document and so are we. It is being hoped that this document shall significantly depart from the current Five Year Plan in its economic strategies. Emphasis on “Faster, Sustainable and More Inclusive Growth” has been clearly spelt out in the Approach Paper,   unfolded by the Planning Commission. The contours of our successive annual plans shall become clear only after the Twelfth Five Year Plan document takes its final shape. Nevertheless, we hope that the finalization of the next year’s annual plan for our state shall be taken up by the Planning Commission of India in the coming few months.

At the national level, there has been a setback in the process of economic revival due to deterioration in the global economic scenario. It will cast its shadow on the national approach to the plan process. We may also be affected indirectly. However, in our State, we start with the advantage of the consolidation of peace and economic growth. Building further on this consolidation, we intend to incorporate new strategies in our next year’s plan of action. We are hopeful that our suggestions shall receive due attention of the Planning Commission at the time of finalizing our plan.

We have maintained our journey on the path of structural reforms and sound management of State finances through the last three years. These are yielding results now. We are determined to continue our march towards a better future with renewed vigour.

Sir, I would like to submit here that the three previous budgets presented by me before this August House, were much more than mere statistical statements of income and expenditure. They were reflective of a pre-meditated and progressive plan of action to trigger, stimulate and sustain socio-economic growth and ensure the welfare of the people of our state. All these action plans were conceived, formulated and executed by the government under the able, determined and courageous guidance of our young, energetic and dynamic Chief Minister Janab Omar Abdullah Saheb.

Through my next year’s budgetary proposals, I have tried to accelerate the momentum generated so far in the process of the socio- economic development and welfare of our people. My ultimate aim is to bring the major indices of development of our State at par with the All India averages and then try to take them farther.

The next year’s budget is also significant in its purely chronological context. It is going to be the fourth consecutive budget of the present coalition government after it has, successfully, completed half of its popularly mandated tenure under the dynamic leadership of Janab Omar Abdullah Saheb, marked by his exemplary courage, vision and statesmanship.

Economic Overview:

I have laid the Economic Survey Report on the Table of this August House a few days back. It may be noted with satisfaction that our GSDP has been continuously on the rise. In terms of the latest available figures, the GSDP of our State for the year 2008-09 was ì 42,315 crore at current prices. It rose to ì 48,197 crore during the year 2009-10. During the year 2010-11, the GSDP further rose to 54,731 crore. The current year’s Advance Estimate has projected the GSDP figure at 62,365 crore. All these figures are based on the revised para-meters of the Central Statistical Office (CSO), adopted by it at the national level. At constant prices (base 2004-05), the corresponding GSDP figures work out at 34,664 crore for the year 2008-09, 36, 329 crore for the year 2009-10, 38,739 crore for the year 2010-11 and ì 41, 367 crore for the current financial year.

The Thirteenth Finance Commission had given us a target of achieving fiscal deficit of 5.3% for the year 2010-11. On the basis of our GSDP figures, the actual fiscal deficit for the last year comes to 4.3%. This is a considerable improvement over the target assigned to us.

The members of this August House are already aware of yet another wave of global meltdown, which showed itself during the current financial year causing unprecedented fall in the value of our rupee in comparison to all major world currencies. Industrial production and exports at the national level have also slowed down. These onslaughts on our national economy are bound to reduce the national GDP growth rate. The current year’s Union Budget had assumed a growth rate of 8.5%. This figure is now estimated to come down to 6.9%, as per the latest reports. In comparison, the growth rate of our GSDP at constant prices for the current financial year works out at 6.8% in comparison to 6.6%, estimated in last March at the time of the presentation of the current year’s Budget by me before this August House.

In an environment full of global uncertainties, it is hazardous to forecast economic growth rate. Nevertheless, in consideration of all relevant factors, I am venturing to peg my next year’s target of GSDP growth at 7.5%.

Per Capita Income:

At current prices, our per capita income figures were ì 30,212 for the year 2008-09, ì 33,665 for the year 2009-10, ì 37,496 for the year 2010-11 and are estimated at ì 41,833 for the current financial year. The per capita income figure for our State at constant prices (base 2004-05)   rose to ` 26, 344 in the year 2009-10 in comparison to  ` 25,641 for the previous year. The per capita income further grew to ì 27,607 during the year 2010-11. The Advance Estimate places this figure at ` 28,932 for the current financial year.

The figures mentioned by me do reflect a steady growth in the per capita income of our people. However, as stated by me before this August House last year also, we continue to lag far behind the All India Per Capita Income figure of                ì 38,005 for the current financial year. It is evident that a lot more must be done by us in the shortest possible time to catch up with the All India figures.

Sectoral Status:

As per Advance Estimate, the contribution of the Primary Sector, comprising Agriculture and Allied activities, to our current fiscal’s GSDP is   estimated at 19.83%. The contribution of the Secondary Sector, comprising industrial production, manufacturing and mining is estimated to reach 25.93%. The contribution of the Tertiary Sector, comprising all types of services, is now estimated to jump to 54.24%.

It may be noted that the share of the Primary Sector continues to slide down, even in comparison to the originally projected share of 21.10% for the current fiscal. While various budgetary initiatives in support of this sector, which were announced by me before this August House during the last two years, have helped in boosting some of the agricultural operations, much more will have to be done at the policy and delivery level. It will continue to be my endeavour to join in any other additional initiatives which can strengthen this basic sector of our economy.

Development of Communication & Energy infrastructure:

A fast and reliable communication network and ample energy form the backbone of any economy. As such, I have been taking stock of   key communication and energy projects from time to time. The completion of these projects will positively impact the trade, industrialization and tourism in our state in a big way and reshape our future budgetary structure. I proceed to cover progress in some of the big ticket infrastructure projects.

Udhampur-Qazigund rail-link:

Civil works on the railway connection between Udhampur and Qazigund are going on smoothly without any reported bottleneck. The project is scheduled to be completed by the year 2017. Recently, the Central Government approved its revised cost at ` 19,000 crore.

National Highway 1A:

As per the latest available reports, the work of four laning and upgrading National Highway 1A is progressing in four out of six segments between Nagrota and Srinagar. The remaining two segments are going through a process of re-bidding. The delay is a cause of concern. We have requested the Central Government to get the allotment of works on these two segments expedited or to authorize their execution in EPC mode.

Mughal Road:

The Mughal Road has already been opened to vehicular traffic for summer months. The cumulative expenditure on this project is expected to reach ì 535 crore in the current financial year as against its approved cost of ` 640 crore. The remaining ` 105 crore are proposed to be allocated during the next year for completing the ongoing road works and bridges.


We have requested the Union Government to fully equip the Srinagar International Airport and operationalise it for international flights, and also to expedite the work of expansion of the Jammu Airport. We hope that early steps shall be taken by the Centre on both these important projects.

Toll Plaza:

Work on the new Toll Plaza at Lakhanpur has been almost completed at a cost of over ì 32 crore. We are hoping for the early transfer of 108 kanals of railway land to us for developing it into an additional parking area. Work on the additional import side bridge over river Ravi is also likely to be completed by the Central Government authorities in the near future.

Power Sector:

Under the New Hydel Policy, all hydel projects of upto 10 megawatt capacity have been reserved for execution by the permanent residents of the State. Offers have been invited for the construction of 10 Mini Hydel Projects in Kashmir and Jammu regions with a total identified capacity of 172 megawatts, involving investment of nearly  1,200 crore. Offers from 61 prospective entrepreneurs have been received and are presently under scrutiny.

Pakal Dul HEP with 1000 MW capacity has been tendered out by the joint venture company of the J&K State Power Development Corporation. The Corporation is also going ahead with the execution of 450 MW Baglihar HEP – Stage II. Additionally, Ganderbal HEP, Parnai HEP, Lower Kalnai, Pahalgam Stage III, Mini Hydel Projects at Dah and Hanu in Ladakh region and Machil HEP have also been put through the tendering process. The Pahalgam III & Machil HEPs are expected to be completed next year. The combined installed capacity of these HEPs shall be around 200 MWs.

Revised Estimates 2011-12:

Now I come to the Revised Estimates of the current financial year. The total budgetary receipts are placed at ì 31,022 crore in the Revised Estimates in comparison to the Budget Estimates of ì 31,212 crore. The total receipts consist of ì 25,513 crore as revenue receipts and ì 5,509 crore as capital receipts.

Tax receipts:

The State’s own tax receipts were reflected in the Budget Estimates at ì 4,183 crore. I am happy to report that the same are now expected to touch ì 4,800 crore. In comparison to the last year’s achievement of ì 3,483 crore, this figure indicates an improvement of ì 1,317 crore. The growth rate over the last year’s realizations works out to around 38%. Out of the total tax receipts, the receipts of the Commercial Taxes Department alone amount to   ì 3,561 crore in comparison to the collection of   ì 2,504 crore made during the last financial year. Thus, out of a total increase of ì 1,317 crore in the tax revenue, the receipts of the Commercial Taxes Department alone exceed the last year’s collection by ì 1,057 crore, indicating an improvement of 42%, which is a record.

During my last budget speech, I had indicated the need of taking new initiatives by the government for improving the administration of the Stamp Act and the registration of instruments of exchange. This August House approved wide ranging amendments in the relevant laws.  These government initiatives have resulted into a phenomenal growth in the collection of Registration Fee and Stamp Duties.  In comparison to the last year’s collection of ì 79 crore, we are hoping to reach the level of ì 133 crore in the current financial year. These figures indicate an increase of about ì 54 crore or 68% improvement over the last year’s collections.

Other tax receipts: Among other tax receipts, the major items are as follows:Taxes on Goods and Passengers: ì 439 crore in Revised Estimates in comparison to ì 337 crore realized last year showing an increase of ì 102 crore or over 30% improvement;

State Excise Duties: ì 383 crore in comparison to ì 337 crore realized last year, indicating an increase of ì 46 crore or 14% improvement over the last year’s achievement.

Non-tax receipts:

The total non-tax receipts were estimated earlier at ì 1,620 crore in BE. This figure has been re-worked in the Revised Estimates at ì 1,851 crore, mainly due to a higher revenue collection target given to the Power Development Department. Besides, receipts mainly on account of dividend from the J&K Bank have risen to ì 67 crore in comparison to the BE of ì 30 crore.  Other major contributors to the non-tax receipts, as reflected in the Revised Estimates are:

    Forestry and Wildlife receipts:  ì 56 crore.

    Mines & Minerals receipts:  ì 43 crore.

    Water Supply & Sanitation receipts:  ì 35 crore.

Main items of expenditure:

Out of the total expenditure reflected in the Revised Estimates, a sum of ì 22,854 crore is now classified as revenue expenditure in comparison to the Budget Estimates of ì 22,752 crore. Out of the total revenue expenditure, the plan revenue expenditure is estimated at ì 1,108 crore in comparison to the Budget Estimates of ì 1,205 crore. The non-plan revenue expenditure is now estimated at ì 21,746 crore in comparison to the Budget Estimates of ì 21,547 crore.

The total capital expenditure in the current year is now estimated at ì  8,168 crore. Out of the total capital expenditure, the Revised Estimates for capital expenditure on plan account are placed at   ì 6,617 crore as compared to the Budget Estimates of ì 7,020 crore. The non-plan capital expenditure is estimated to increase to ì 1,551 crore in comparison to the Budget Estimates of ì 1,440 crore.

Salary expenditure:

During the course of the current financial year, three DA installments have been released in favour of the government employees and pensioners, including one installment which had become payable last year. The government has also decided to pay 100% of the arrears of pay and pension revision following the adoption of the Sixth Central Pay Commission Award. These arrears shall be paid in five equal annual installments. After taking these factors into account, the total salary bill is expected to rise to ì 11,654 crore, inclusive of the plan component of ì 327 crore and grants-in-aid amount of ì 644 crore which is mainly utilized by the autonomous organizations for the payment of salary to their employees.

The expenditure on pension and other retirement benefits was earlier estimated at ` 2,651 crore for the current fiscal. The same is now estimated to reach ` 2,780 crore, as per the Revised Estimates.

The expenditure on account of the purchase of electrical energy from the Central Public Sector Undertakings and J&K SPDC was originally estimated at ` 2,400 crore. In the Revised Estimates, the figure has been proposed at ` 3,000 crore to take care of the increase in the purchase price of energy, purchase of additional energy and the cost of running the gas turbines.

Budget Estimates 2012-13:

The next year’s total receipts and expenditure are estimated at ` 33,853 crore each. The total revenue receipts are estimated at ` 29,948 crore based on the anticipated scheme of financing of the plan. These figures may undergo some variation when our plan outlay and its Scheme  of Financing are finalized by the Planning Commission. The share of central taxes is indicated at the level of ` 4,245 crore, as against the RE figure of ` 3,691 crore in the current financial year. The total non-plan grants from the centre have been placed at ` 4,496 crore, against the RE figure of  ` 4,858 crore in the current financial year, inclusive of the non-plan revenue gap grant under the Award of the Thirteenth Finance Commission.

State’s own Tax Revenue:

Tax revenue, which is likely to touch ` 4,800 crore in the current financial year, is expected to further grow to ` 5,419 crore in the next financial year. This would mean a targeted growth of over 29.5 percent in comparison to the current year’s Budget Estimates of ì 4,183 crore.

VAT Collections:

The VAT and GST collections by the Commercial Taxes Department have been targeted at ` 3,940 crore as against the current financial year’s BE target of ` 3,025 crore, aiming at BE on BE increase of ` 915 crore, working out to a growth rate of about 30 percent.

Other Tax Collections:

Taxes on Goods & Passengers are estimated to rise to ` 461 crore, as against the current financial year’s Budget Estimates of ` 382 crore. Collection of Excise Duties has been projected at ` 404 crore, as against the current year’s Budget Estimates of ` 333 crore. Collections on account of Stamp Duty & Registration Fee have been projected at ` 152 crore. The target for Electricity Duty has been kept at ` 306 crore, corresponding to the revenue target of ì 1,732 crore given to the Power Development Department.

Non-Tax Revenue:

The total non-tax revenue targets are ì 2,118 crore. A revenue target of ` 1,732 crore is proposed to be assigned to the Power Development Department, against their revised target of ` 1,486 crore in the current financial year. Other major targets of non-tax revenue are Forestry & Wildlife  65 crore, Mines and Minerals ` 45 crore, Water Supply & Sanitation ` 37 crore and expected Dividend, mainly from the J&K Bank, ` 70 crore.


The total expenditure is tentatively classified between ` 24,990 crore, as revenue expenditure and ` 8,863 crore as capital expenditure. The capital expenditure comprises ` 7,028 crore on account of the plan and ` 1,835 crore on account of non-plan. Out of the total revenue expenditure,  ` 23,548 crore is classified as non-plan revenue expenditure, while as ` 1,442 crore is expected to be incurred as plan revenue expenditure.

Salaries & Pensions:

Out of the total revenue expenditure, salaries of the government employees account for the biggest chunk, estimated to reach ` 13,115 crore, inclusive of the provision of ì 700 crore for fresh DA installments, a plan salary component of  ì 369 crore and grants-in-aid of ì 658 crore.

The expenditure on pensions including other retirement benefits, is estimated at  3,025 crore. The total expenditure on salaries & pensions will, therefore, rise to ì 16,140 crore during the next financial year.

A provision of ` 3,100 crore is proposed in the next year’s Budget Estimates for the purchase of energy, as against the current year’s RE figure    of ` 3,000 crore.

The expenditure on account of interest payment against loans has been estimated at  2,663 crore in comparison to the RE figure of   ` 2,538 crore in the current financial year.

Grants-in-aid to the Local Bodies, Autonomous Organizations and other institutions account for ` 658 crore. The Maintenance and Repairs of assets is expected to involve an expenditure of ` 289 crore. A sum of ` 116 crore has been proposed on account of honorarium to SPOs and VDCs.

Annual Plan 2012-13:

The Planning Commission of India has yet to formally determine the size of the Twelfth Five Year Plan, which, when finalized, will also give us a firm idea about the likely size of our successive annual plans for the coming five years. However, the expectation of around 10% step up in the next year’s plan size will be reasonable. As such, the state government has worked out its plan proposal based on a total outlay of ` 7,300 crore for the next financial year. We have requested the Planning Commission to continue the Prime Minister’s Reconstruction Plan till we complete the ongoing projects taken up under PMRP. Accordingly, we are projecting a requirement of ` 700 crore under PMRP during the next financial year, over and above the annual plan outlay. The main schemes, included in the PMRP, to be funded out of the proposed allocation are Power Transmission, Mughal Road, Counterpart Funds for the World Bank funded schemes under ERA, completion of TRTs for Kashmiri Migrants and Rehabilitation of Dal dwellers. A provision of about  ì 1,000 crore, out of the total outlay, is being kept as the State Share under various Centrally Sponsored Schemes to enable us to access around  ì 2,500 crore from the various Ministries of the Central Government, over and above the State Plan.

In the annual plan, we have proposed a provision of ` 541 crore for the schemes to be covered under the Agriculture and Rural Development sector. Under the Social Services Sector, including Health, Education, Water  Supply and Social Welfare, we have proposed an allocation of  ` 2,532 crore to take care of the ongoing schemes as well as the expansion programmes. Irrigation & Flood Control gets a  share of ì 447 crore. The Energy Sector accounts for ì 455 crore. The Transport sector, including R&B, accounts for  ì 832 crore. General Economic Services, including Tourism and the Special Area Development Programme, are to receive ì 1,231 crore. Industries & Minerals get ì 153 crore and General Services are proposed to be given a share of ì 706 crore. Under Special Area Programmes, ì 396 crore are proposed to be spent. I proceed to share the salient features of the proposed development programmes for the next fiscal with the Hon’ble Members of this August House.

School Education:

As I had stated last year, one of the main challenges, confronting us, was to reduce the gender gap in education and literacy. A major government initiative, announced by me during the last budget session, was the scheme ‘BETI ANMOL’, designed to popularize higher school education amongst girls. Under this scheme, a cash incentive of ` 5,000 in the shape of a Fixed Deposit Receipt is payable to all girl students from  BPL families, inhabiting 97 identified Educationally Backward Blocks of the State, who successfully seek admission in the 11th class.

I am happy to report that, in the current year, about 6000 eligible girl students have been identified to be covered under this scheme. The impact of the scheme is expected to be much more next year after the results of the next matriculation examinations are announced in the coming months. We expect this number to increase to 10,000 during the next financial year, involving an expenditure of   ì 500 lakh.

The scheme of ‘SAAKSHAR BHARAT MISSION’ has been launched at the national level. All the twenty districts, which had literacy percentage below 50%, as per the census of 2001, are being covered under the total literacy campaign of ‘Saakshar Bharat Mission’.

A sum of ` 530 crore is targeted to be incurred as the State share under the ‘SARVA SHIKSHA ABHIYAN (SSA)’ and ‘RASHTRIYA MADHYAMIC SHIKHA ABHIYAN (RMSA)’.

Higher and Technical Education:

The construction of 11 new degree colleges under the state sector and 11 Model Degree Colleges under the 50:50 Centrally Sponsored Schemes is in progress. Besides, the construction of 10 degree colleges under PMRP is also underway. An expenditure of ` 191 crore is proposed under the Plan, inclusive of ì 145 crore on the capital component.

Eighteen new Polytechnics are being established and 27 ITIs are under upgradation. For the next fiscal, a sum of ` 20 crore is proposed to be kept for the ongoing and new works to be taken up for skill impartation and up-gradation.


A sum of ` 321 crore is proposed to be spent as the State plan component on various irrigation schemes. Additionally, ì 400 crore are expected to come under AIBP and NABARD funding.

Public Health Engineering:

The PHE Department has completed 1,208 Water Supply Schemes at a cost of ` 1,187 crore under the mega flagship scheme ‘National Rural Drinking Water Programme (NRDWP)’ and other schemes. The number of additional habitations, likely to be covered by potable drinking water supply in the current financial year, is 805, for which the current year’s expected expenditure under NRDWP is ` 837 crore. For the next year, the targeted expenditure under this programme is ` 562 crore to cover a further 1,414 habitations.

Roads and Bridges:

During the current fiscal 799 kms of roads have been completed till January, 2012. The Department has also completed 45 bridges in the current financial year by January, 2012. Next year, the proposed outlay for the R&B Sector is ì 682 crore.

Agriculture and Rural Development:

For the next financial year, the total proposed plan investment in the Agriculture Sector is ì 343 crore. For the Rural Development sector, the proposed allocation is ` 198 crore. Additionally, funds shall also be available under the Centrally Sponsored Schemes like ‘RKVY’, ‘Technology Mission’ and other schemes from the Ministry of Agriculture and the Ministry of Rural Development of the Central Government. The focus of the department is on the improvement of the Seed Replacement Rate, timely and adequate supply of agriculture inputs, farm mechanization, post harvest facilities and marketing in all the key sub-sectors, including Horticulture, Sericulture, Vegetables and Commercial Floriculture.


For the Super Specialty Hospital at Jammu, 819 posts have been created with a view to make it fully functional. Additionally, 483 posts have been created for the Emergency Block and Paediatric Hospital at Jammu. For the Institute of Traumatology and the Nursing College at Srinagar, 1040 posts have been created. Additional expenditure on the salaries for these posts would be around ì 100 crore per annum. A total expenditure of ` 366 crore is proposed to be incurred in the H&ME sector during the next financial year, exclusive of the funds available under the Centrally Sponsored Schemes like ‘NRHM’.

Under the ‘National Rural Health Mission (NRHM)’, cumulative expenditure of ` 680 crore is expected by the end of the current fiscal. An expenditure of ` 150 crore is expected during the next fiscal.

The approved number of ASHAs has risen to 90,000. The State has made considerable improvements in health parameters like the Infant Mortality Rate, Maternal Mortality Rate, Total Fertility Rate and the percentage of institutional and safe deliveries.

The state government has finalized a drug policy to promote the common man’s access to safe, effective, quality and reasonably priced medicines and to ensure the adoption of good prescription practices among the doctors.

Other sectors:

The next year’s allocation under the Housing and Urban Development sector has been proposed at ` 311 crore, excluding the   funds which would be available under the ‘JNNURM’. An additional provision of ì 369 crore shall be available for ‘ERA’. ` 124 crore are proposed for the Tourism Sector. The Industrial Sector accounts for ` 153 crore.

In the Forest and Environmental sector, a sum of ` 42 crore has been proposed, exclusive of the allocations available under the Thirteenth Finance Commission Award. A total of ì 212 crore of plan grants would be available under the Award for various development activities.

Employment Generation and ‘SKEWPY’:

As the Hon’ble members are fully aware, ‘SKEWPY’ is an integrated programme, which helps us in keeping the burning issue of educated unemployment in focus.  As of now, the Seed Capital Scheme of ‘SKEWPY’ has resulted into approval to about 1600 DPRs, involving project costs of ì 118 crore. Seed capital of ì 26 crore has been released in favour of 800 entrepreneurs. The next year’s target of utilization of the Seed Capital Fund is ` 50 crore, involving a targeted 3,000 entrepreneurs and including off-bank financing of unemployed youth under the newly launched ‘Youth Start-up Loan Scheme’.

About 32,000 unemployed educated youth have been brought under the purview of the Voluntary Service Allowance. An expenditure of               ` 40 crore has been anticipated under the ‘VSA’ scheme during the next financial year.

The programme of skill development for the youth has been taken up in a Mission Mode to prepare our youth to get skilled and highly skilled jobs in the growing, but highly competitive, job markets.

The skill up-gradation programme is being supplemented through ‘Rural Self-employment Training Institutes (RSETIs)’, which are being operationalised by the J&K Bank and State Bank  of India, for all the districts of the state. The training centres, run by the Directorates of Industries and Commerce, Handicrafts and Handlooms and a host of other government and non-government organizations, and their syllabi, are proposed to be standardized under the Skill Development Mission.

The State Self-employment Scheme has a target of setting up over 9,000 enterprises in the current financial year. The Prime Minister’s initiative in training 8,000 unemployed youth of the state annually in centres of excellence outside the State for a period of five years is already under implementation.

The report on employment generation in Jammu and Kashmir, prepared by the Expert Group, headed by Dr. C Rangarajan, Chairman of the Economic Advisory Council of the Prime Minister, envisages an action programme, involving an expenditure of ` 761 crore, aimed at facilitating the absorption of educated youth of the state in the job market. The programme has been rolled out already through schemes like ‘HIMAYAT’, ‘UDAAN’ and others.

The government has also fast tracked the recruitment process against the vacancies, arising in various government departments from time to time. During the last three years, selection of over 39,000 educated youth   has been made by the PSC, J&K SSB and the Police Recruitment Board. This figure excludes a very large number of educated youth, engaged under ‘NRHM’, ‘Rehbar-e-Talim’ and other schemes, which are outside the purview of our recruitment agencies, meant for making selections for regular appointments under the State government.

Additionally, recruitment to a large number of Class-IV posts has been going on through the Departmental Committees.

Inclusive Development:

Socio-economic development for all is the hallmark of the coalition government, headed by our visionary leader Janab Omar Abdullah Saheb,                 as also of the Central leadership of Prime Minister, Dr. Manmohan Singh Ji and the UPA Chairperson Smt. Sonia Gandhi Ji. Accordingly, it has been my constant endeavour to make the budgetary exercise inclusive of all regions of the State and all sections of our society.

One of the historical achievements of the present coalition government is the highly successful holding of panchayat elections in the current financial year marked with very enthusiastic and popular participation of the people to the extent of 80% of the registered electorate. Janab Omar Abdullah Saheb had promised to transfer functions, functionaries and funds to the elected panchayats with a view to empowering the people at the grass roots level. A comprehensive exercise has been concluded by the government in this behalf and orders have been issued in respect of 14 Government Departments/ Ministries to transfer a large number of listed activities, alongwith their other connected functions to the Panchayats, Block Development Councils and the District Planning & Development Boards. Devolution of about ì 1,531 crore is expected to reach the elected bodies in the next financial year, inclusive of funds flowing under schemes like ‘MG-NREGA’ and other schemes, which shall devolve directly on the elected Panchayats. If the Panchayats can make proper schemes for utilization of ‘MG-NREGA’ funds and also develop their absorption capacity, they can increase their claims to around ì 2,500 crore under this one scheme alone.

A plan provision of ì 148 crore is proposed for the next year for Kargil and Leh districts. A sum of ì 125 crore is proposed to be spent exclusively in the Border Blocks under the Border Area Development Programme (BADP). A provision of 194 crore is being made for the Constituency Development Fund.

The next year’s plan outlay includes a sum of ì 40 crore under the Tribal Sub-Plan, a sum of      ì 18 crore for the welfare of Gujjars & Bakerwals, a sum of ì 16 crore for the welfare of Pahari Speaking People, a sum of ì 21 crore for Scheduled Castes and OBCs and a sum of ì 49 crore under the ‘Rashtriya Shram Vikas Yojana’. Additionally, a provision of ì 139 crore has been made for the two Directorates of Social Welfare for executing Women and Child Development Schemes.

Separate outlays are also being proposed under various programmes exclusively aimed at the welfare and empowerment of women through the schemes being implemented by the Department of the Health and Medical Education Department, the Department of Social Welfare, the J&K Commission for Women and the J&K Women Development Corporation etc through the process of gender-budgeting.

Last year, I had referred to a provision of ì 100 crore under the ‘Border Area Development Programme (BADP)’. It is a matter of satisfaction that under the ‘BADP’, an amount of ì 125 crore has been authorized during the current year. I had also referred to a special package to address the unique development needs of other backward areas and bad pockets. During the current financial year, we have made a beginning by releasing an additionality of ì 11.64 crore for taking up developmental projects in the identified areas. I propose to carry forward this process during the ensuing year and announce a special provision of ì 50 crore for such areas over and above the likely BADP allocation of ì 125 crore and the ‘Backward Region Grant Fund (BRGF)’ allocation of ì 52 crore.

Welfare of Migrants:

Out of the 5,242 two-room tenements, meant for the Kashmiri migrants, 4,876 flats have been completed and the remaining units shall be completed in the current financial year at a total estimated cost of ì 484 crore. A sum of ì 140 crore was kept as the provision for meeting the salary expenditure of the migrant employees. I propose to increase it to ì 189 crore in the current year to provide for the payment of one installment of the arrears of pay revision. For the BE (2012-13), the proposed figure is ì 171 crore.  Additionally, an expenditure of ì 104 crore is proposed to meet the requirement on cash assistance for the Kashmiri migrant families. Further,  ì 76 crore are expected to be incurred on the scheme of the return and rehabilitation of the migrants in the current financial year. The next year’s provision has been kept at  ì 130 crore.

A medical insurance scheme for the Kashmiri migrants was announced by me earlier in this August House. Hoping that the scheme will finally take off after the prospective beneficiaries feel persuaded to take its benefits and come forward to join this scheme aimed at mitigating their sufferings due to ailments, I propose to repeat a provision of ì 8 crore in the next year’s budget for this purpose.

Financial Restructuring:

Last year, I had apprised this August House about the details of the government’s decision to switch-over to the ‘ways and means’ system of the Reserve Bank of India in place of the traditional ‘memorandum of understanding’ which had been operational for many years between the government and the Jammu and Kashmir Bank.  As anticipated by me, and elaborated before this August House last year, the new system has been working very satisfactorily to the mutual advantage of the State Government and the Jammu and Kashmir Bank. We have saved interest expenditure of around ì 200 crore so far in the current financial year through the new arrangement.

On the other hand, the J&K Bank made record profits and declared an all time high dividend of 260% to its shareholders. The amount of dividend disbursed, included a sum of ì 67 crore paid to the State Government as its majority share-holder. The Bank continues to move towards still higher business and profit targets in the current financial year.

I am very sure that the fears expressed last year by my friends, sitting on the other side of this August House, have been adequately allayed by this time. I assure the Hon’ble Members of this August House that other reforms, initiated by me, and those which may be initiated in future, shall always be guided by the principles of public benefit and shall continue to be advantageous to the financial management of the State.

State Financial Corporation:

Continuing my efforts to revive the glorious past of this institution and resurrect its role in the rapid industrialization and promotion of economic activities in the State, the government has sanctioned a sum of ì 22 crore as additional share capital in favour of the J&K State Financial Corporation in the current financial year. Additionally, a sum of ì 14 crore, reflected as the unpaid dividend amount to the State government, accrued under the statute, has also been converted into paid up share capital of the Corporation. We hope to contribute an additional capital of ì 25 crore towards the authorized share capital of the Corporation in order to clear all its past liabilities towards SIDBI. These measures will strengthen the Corporation’s claims on funds to the extent of ì 150 crore for the revival of its activities, as recommended by the Prime Minister’s Task Force on MSME, and, subsequently, also supported by the Prime Minister’s Expert Group on the generation of employment for the youth in Jammu and Kashmir.

The Corporation has already cleared the backlog of its audited balance sheets upto the year 2008-09. I am very hopeful of its audited accounts becoming upto date in the next few months’ time.

Computerization of VAT Administration:

The Government is continuing its efforts in making extended use of Information Technology for improving its public interface and for            enhancing the transparency and efficiency of the government departments. I am happy to report that an IT-enabled system has been rolled out in the Commercial Taxes Department. Facilities of downloading forms, e-filing of returns and e-payment are being made available. I appeal to the registered dealers to come forward and make full use of these facilities.

Outsourcing of services:

Fast expansion of the Services Sector is a global phenomenon. In our own State, we are witness to regular and rapid increase in the share of the Service Sector in our GSDP. This Sector has tremendous scope for providing vast employment opportunities to our unemployed youth.

The requirements of peripheral services by the government departments for their own use have also increased manifold over the years. As such, the government has decided to adopt a systematic process of outsourcing of non-core, peripheral and auxiliary activities in the identified fields by all the government departments, thereby creating additional opportunities of employment for our youth and also encouraging the growth of expertise in the private sector in such areas. These services are proposed to be outsourced to the private sector under a comprehensive set of guidelines and also under the PPP mode, wherever it is found more feasible.

Re-structuring of public sector enterprises:

Our public sector has played a historic role in the field of economic development of the State by promoting, supporting, actively participating as also indulging in the direct production of goods and services for the benefit of the society. Over the years, the private sector has grown as a sound and healthy competitor and has now come of age. This development has resulted into the redundancy of some of the functions performed by our public sector. Many of their manufacturing activities have already closed down over the years and several other activities have been scaled down.

The government has embarked upon a comprehensive exercise of re-structuring of the existing Public Sector activities to make them more aptly suited to the present business environment. A High Level Committee of Officers and experts has been given the task of preparing well considered and detailed recommendations in this behalf.

In the meanwhile, I propose a sum of ì 75 crore as budgetary support for the Public Sector Enterprises in the Budget Estimates for the next financial year. This provision includes a sum of ì 26 crore to take care of claims under VRS/GHS.

Arrears of pay revision and other benefits to the government employees:

Last year, I had reported before this August House that the government had decided to pay off 50% of the arrears to the government employees and pensioners on account of the revision of pay and pensions, as per the recommendations made by the Sixth Central Pay Commission.

Continuing the employees’-friendly policy of the coalition government, headed by Jenab Omar Abdullah Saheb, the government has settled all their pending pay related issues through mutual understanding and it has been decided to pay off 100% arrears in five equal annual installments. The current year’s liabilities on this account have almost doubled to about ì 917 crore in the Revised Estimates.

The House Rent Allowance (HRA) has been brought at par with the Central Government employees by increasing the highest rate applicable to Srinagar and Jammu cities to 20% with effect from first July 2011, from its previous rate of 17.5% of pay. This measure has necessitated an additional outgo of around ì 70 crore in the current financial year and will involve additional expenditure of about ì 110 crore during the next financial year.

The Hardship Allowance, sanctioned by the government in favour of the police personnel, is expected to cost ì 122 crore in the current financial year. A provision of ì 129 crore has been included in the Budget Estimates for the next financial year for this purpose.

As a further gesture of its employees’ friendly policy, the government enhanced Move TA of moving employees from ì 6,000 to ì 10,000 for all categories and also enhanced the rate of Temporary Move Allowance from ì 650 per month to ì 1,500 per month.

Part - B

I now come to the last part of my speech before this August House.

Continuing with Fiscal Initiatives:

VAT on food grains:

I had apprised the Hon’ble Members last year that several states are charging VAT at rates, ranging from 4% to 5%, on atta, maida, suji, besan, paddy and rice etc. In consideration of last year’s rising food inflation as an All India phenomenon, I had deferred my proposal to bring these items under the VAT net and announced the continuation of exemption from the levy of VAT on these commodities upto 31st March, 2012.

Food inflation has, considerably, eased in the recent months. I am tempted to bring these items under the tax net from the next financial year. However, I feel that it will be prudent to wait till the economy stabilizes sufficiently. Accordingly, I announce continuation of these exemptions upto 31st March, 2013. I will have to forego revenue of over a couple of hundred crore of rupees on this account.

VAT on Industrial units:

I had mentioned last year that the industrial units, registered in the state, have been enjoying tax concessions under the relevant packages of incentives, announced by the government from time to time. With the switch over to the VAT regime, these concessions were supposed to have come to an end but were continued in a modified manner. Serious discussions have been taking place at the national level through the Empowered Committee of State Finance Ministers and other national level workshops to switch over to a uniform national level Goods and Services Tax (GST) regime in the interest of bringing in further transparency, simplicity and efficiency in tax administration and removal of the cascading effect of the tax burden on the consumers. The proposed date of implementation of GST has been deferred from time to time because of a lack of unanimity among the States.

Tax concessions to the industry cost nearly  ì 500 crore annually. I had announced extension of the benefit of this tax concession to the industry for a further period of one year or till adoption of the proposed GST regime by our state, whichever happens to be earlier. The period of concession expires on 31-3-2012. On the aforementioned considerations, which are still valid, I announce continuation of the existing tax concession to the industrial units for a further period of one year upto 31st March, 2013, or till adoption of the new GST regime by our State, whichever happens earlier.

Tax on Hotels:

The Tourism Sector is highly beneficial to our people and to the State’s economy, but it contributes very little to the revenues of the State, despite the fact that it puts heavy pressure on the resources of the State and its infrastructure.

In view of the fluctuating arrival of tourists in the State, I had announced several concessions and exemptions favouring the Tourism sector. These concessions have been extended by me on yearly basis, first upto 31st March, 2011, and then upto 31st March, 2012.

The current financial year has been a boon for the Tourism sector of the State. I would be amply justified in asking this sector to start making some revenue collections from the visitors by way of taxes and fees under the existing laws for contributing to the exchequer of the State. However, as a gesture of high goodwill of the government in favour of this sector, I announce no change in the status-quo for a further period of one year, commencing from the first April, 2012.

Additional benefits for the farming community:

VAT on fertilizers:

A smiling farmer is the most prominent symbol of economic strength. The present government is determined to broaden his smile by continuing to support the agriculture sector through all possible means.

Chemical fertilizers, bio-fertilizers and micro-nutrients are extensively used for improving farm productivity. As a sequel to the earlier tax concessions, announced by me for my brothers engaged in agriculture, I propose to fully exempt all types of chemical fertilizers, bio-fertilizers and micro-nutrients from the levy of VAT.

VAT on fungicides:

I have already exempted pesticides, weedicides and insecticides from the levy of VAT. The use of fungicides is equally important for the protection of crops and improvement in productivity. Presently, fungicides attract VAT at 13.5%. I, now, propose to exempt all types of fungicides from the levy of VAT.

Service Tax on Crop Insurance and Cattle Insurance:

A Central Government supported scheme of crop insurance is under operation in the state also. However, the National Agriculture Insurance Company has not provided the desired level of coverage to the farmers so far. Similarly, another scheme of cattle insurance is in operation through private sector insurance companies. These private sector insurance companies are reluctant in coming forward to extend insurance cover to cattle, sheep, goats and poultry units as they apprehend high risks and low profits in this type of insurance activity.

All insurance services attract levy of service tax under the provisions of the J&K General Sales Tax Act. As such, in order to attain the dual objectives of making this vital insurance programme popular among the farmers and more attractive for the insurance companies, I propose to exempt the insurance services, which cover agricultural and horticultural crops and all types of cattle wealth, including infrastructure of dairy, poultry, sheep, goats, bird units and fish farms, from the tax, chargeable under the J&K GST Act.

Incentives for the Tourism sector:

Next to Agriculture, the Tourism sector has always proved to be an important vehicle of economic growth and employment generation in our State. This sector has gone through tough times during the last over two decades. We are expecting a turnaround in this sector now because of the very encouraging experience of the last summer. The Government has, accordingly, revisited the existing package of incentives for ‘Tourism Units’, which term includes hotels, motels, houseboats, paying guest houses, cafeterias, swimming pools, conference centres, amusement parks, recreation centres, cable cars, adventure activities and tourist coaches etc. I am happy to announce the following new package of incentives to benefit the ‘Tourism Units’:-

    • (i) The list of areas and locations, where the ‘Tourism Units’ shall be eligible to get incentives as per the new package, is being considerably liberalized and expanded.

    • (ii) A Capital Outright Investment Subsidy of 30% shall be given by the government on fixed assets, created by new investments, subject to a limit of rupees 30 lakh.

    • (iii) The limit on the amount of Capital Subsidy shall be increased to rupees 100 lakh in the case of Prestigious Units, which invest rupees 25 crore or more.

    • (iv) The Capital Subsidy shall also be available on substantial expansion by the existing Units, which make at least one third addition to their existing bed capacity.

    • (v) The cost of preparation of Detailed Project Reports shall be reimbursed by the Government in full.

    • (vi) Remission of Stamp Duty on mortgages to be allowed to the extent of rupees fifty thousand.

    • (vii)  The cost of Insurance Cover shall be subsidized up to 60%.

    • (viii)  The cost of DG Sets shall be subsidized up to 75%.

    • (ix)  Capital Subsidy in case of Paying Guest Houses shall be 40%.

    • (x)  Subsidy up to 50% shall be admissible on equipment for adventure tourism, kitchen & related appliances, tourist coaches, air conditioning, office automation, etc.

    • (xi)  The cost of training of managerial personnel shall be reimbursed to the extent of 50%.

Details of the expanded list of locations, where these incentives shall be available, the conditions of eligibility and the procedure for sanction of these incentives, along with other details, shall be notified by the Government separately.

Lessening the burden on housewives:

Housewives have been weary of rising prices and keep on complaining that their home budget is going out of hand. With a view to improving their home budget, I am inclined to transfer a part of their burden to my budget. Accordingly, I announce complete removal of Value Added Tax on domestic cooking gas. I do hope that with this measure, not only will the budgetary deficit of their homes get somewhat mitigated, the pressure on our Power Development Department for more and more energy supply shall also get reduced.

At this juncture, I have two more announcements to make in pursuance of my gender budgeting approach in budget formulation.

Under the ‘Beti Anmol Scheme’, the Government has decided to incentivize admissions to the 11th Class, taken by girl students, belonging to BPL families and living in Educationally Backward Blocks. I further propose to fully exempt such girl students from making any contributions to the authorized Local Funds of the concerned Government Higher Secondary Schools. This measure shall provide to them, an additional financial relief, varying between rupees 600 to rupees 900.

Every year, thousands of girls, belonging to BPL families, compete for Government jobs through the J&K Public Service Commission, the J&K Services Selection Board and the J&K Police Recruitment Board. They are required to pay the prescribed Application Fee and a fee for appearing at the competitive examinations. I propose to exempt them from making such payments. The losses, caused to the Revolving Funds of the examining bodies, shall be compensated by the Government, wherever necessary.

Considerations for our Youth and Students:

Information Technology, particularly the use of IT gadgets like desktops, laptops, palmtops etc has become very popular among our youth. Unfortunately, the high price tag of these items has kept them out of the reach of the less affluent sections of our society. Nevertheless, the use of computer peripherals like pen-drives, CDs, memory cards, chips, headphones, computer cleaning kits, electronic diaries and other IT peripherals has become very common, even among the youth who do not own computers themselves. With a view to further boosting the use of Information Technology among the youth, I propose to wholly exempt computers and all the aforementioned IT related items from the levy of VAT.

Some stationery items are being taxed at the rate of 13.5%. Another group of stationery items comes under the 5% category. Items like adhesives, gums, glues, adhesive solutions, gum pastes, lapping compounds, epoxies, resins, tapes, tags, markers, sealing wax, paper envelopes, pencils, crayons, highlighters, erasers, sharpeners, pencil boxes, ‘takhti’ etc are extensively used by our school going children. These young groups constitute our future. I feel that we owe it to them to contribute to the building of their future. As a token of my contribution, I propose to fully exempt all the aforementioned stationery items from the levy of VAT.

Exemption to mini hydel projects from certain taxes:

The J&K State Hydroelectric Projects Development Policy, 2011, seeks to accelerate the construction of Mini Hydel Projects by the private sector under the IPP Mode. This sunrise, clean and green industry needs some initial support from the government for improving the financial viability of Mini Hydel Projects and keeping their cost of generation low. I, accordingly, propose to exempt all power generation and transmission equipment, building material and construction equipment for the hydel projects, awarded under this policy, from the levy of tax under the J&K Entry Tax Act. As a further incentive to such hydel projects in the private sector, the new policy also provides for exemption from the levy under the J&K Water Resources (Regulation and Management) Act, 2010, for a period of 10 years.

Some more exemptions from VAT/ GST:

Service Tax on IT Institutes:

All coaching centres, teaching institutes and educational institutions in the private sector are subjected to the levy of tax under the J&K GST Act. IT education is also covered by this tax.

The Government has been encouraging the establishment of IT centres and institutes in the private sector with a view to promoting computer literacy, IT awareness and IT applications within the State. In support of this objective, I propose to exempt all IT Institutes, IT coaching centres and IT educational institutions from the levy of tax under the J&K GST Act.

Service Tax on Medical Treatment:

Medical services in the private sector had been brought under the ambit of tax, chargeable under the J&K GST Act. Private hospitals, nursing homes, diagnostic centres, pathological laboratories etc have to pay service tax at the rate of 10.5%. It has been pleaded before me that medical services are provided to the sick in conditions of distress. It is widely believed that tax on medical services is the only tax which is to be paid by people, going through conditions of misery, regardless of their financial status.

I have thought over the issue and feel inclined to agree with this view. I, therefore, propose to remove all types of medical, diagnostic and curative services for humans, as well as the veterinary sector, from the levy of tax under the J&K GST Act. I trust that the benefit of this exemption shall be passed on to the patients. I shall be constrained to withdraw this concession if this does not come about.

VAT on electric blankets:

The use of electric blankets in homes, hospitals and tourism establishments is gaining popularity. Presently, it attracts VAT at 13.5%.                  I propose to exempt this item from the levy of VAT in the interest of popularizing its use and helping in the promotion of local industry.

Levy of tax on job works:

Execution of ‘job works’ by a registered industrial unit, on behalf of another registered industrial unit, attracts the levy of tax under the J&K GST Act. Several industrial organizations have contended that this levy of tax would take away all the benefits of industrial clusters, which are to be established as part of the current industrial policy followed by the Ministry of MSME, as this policy involves undertaking of lot of ‘job works’, by way of specialized services, to be rendered by the industrial units.

With a view to resolving this issue, I announce 100% exemption from the levy of tax under the J&K GST Act in favour of registered industrial units in respect of ‘job works’, done by them on behalf of any other industrial unit.

Entry Tax on items for scientific research:

Scientific research is essential for any economy to grow. The institutes, engaged in the conduct of such research in our State, are dependent on costly scientific equipment, critical chemicals and reagents, which are to be procured from outside the State. Presently, such goods are liable to Entry Tax. In order to facilitate and encourage scientific research, I propose to exempt scientific equipment, critical chemicals and reagents, used by the Research and Development Institutes of the Central and the State Governments, functioning within the State, from the levy of Entry Tax.

Stamp Duty rates on certain transactions/deeds:

I have apprised the Hon’ble Members of this August House about the tremendous improvement in tax collections from Stamp Duty and registration fees. It has come to my notice that the raising of loans from commercial banks and the registration of hypothecation deeds against such loans has become costly. I have examined the issue and propose the following modifications in the existing rate structure:

    (i) Stamp Duty on deeds of hypothecation shall be reduced from its current level of 0.5% to 0.25% and shall be subject to a minimum of ` 1,000 and a maximum limit of ì 50,000 in place of the present limit of ` 5 lakh.

    (ii) The Stamp Duty on equitable mortgage shall continue to be 0.25%, but will be subject to a minimum limit of ` 1,000 and a maximum limit of ` 50,000 in place of the existing upper limit of ` 5 lakh.

Strengthening the collection mechanism of GST:

The amount collected through the government departments, making deduction of tax at source under the provisions of the J&K GST Act, forms a sizeable chunk of revenue. In order to strengthen this mechanism, I propose to make timely and proper deduction of this tax and its timely deposit into the government treasuries mandatory. Once this is done, the large number of contractors, who have, practically, no direct responsibility of depositing this tax into the treasury, can be saved from unnecessary procedural hassles. I further propose to take the following measures to simplify the procedure in this behalf:-

    (i) The tax clearance certificate, which is required to be obtained afresh by the contractors for each NIT, shall remain valid for the whole financial year.

    (ii) Security, which is equivalent to 10% of the expected annual turnover, shall be waived off.

    (iii) The registration renewal fee shall also be waived off.

Special Amnesty Scheme from SFC for less privileged classes:

The J&K State Financial Corporation had extended soft loans to beneficiaries from the Scheduled Castes, Scheduled Tribes and Physically Challenged groups. As of now, over 100 cases, belonging to SC and ST and a couple of cases, belonging to Physically Challenged groups, are pending settlement, despite the lapse of nearly two decades. I propose to settle all these long pending disputed cases through a Special Amnesty Scheme, which will be worked out by the J&K SFC, keeping in view the indigent circumstances of these beneficiaries.

Having announced all these relief measures and financial incentives, I deserve to be compensated for the loss of revenue involved in these measures. For this purpose, I propose to touch only a few areas.

Anti- tobacco measures:

As a part of the health protection measures, I had announced a couple of tax measures to curb the menace of smoking and other forms of tobacco consumption. I had announced an  increase in Toll on the import of raw tobacco from 150 per quintal to 250 per quintal. I had also announced increase in VAT from 13.5% to 25% on the sales of cigarettes and other related products.

The monitoring of imports and sales of raw tobacco and cigarettes during the current financial year, up to the third quarter, has revealed that the actual imports have not increased so far, even though they do not show any declining trend over the previous year’s import figures. I propose to continue with my anti tobacco campaign, which I had started last year, and announce a further increase in the rate of VAT from 25% to 30%.

Last year, I had announced a contribution of rupees one crore to the corpus of the Cancer Treatment and Management Fund. Government employees have also contributed in large numbers to the Fund, which I highly commend. The Fund has done an appreciable job by extending financial help of over rupees one crore and twenty two lakh to 444 needy and poor patients. I announce a further contribution of rupees two crore to this Fund during the next fiscal. Simultaneously, I repeat my appeal to all the Government employees to donate generously to this Fund as they did the last time.

    GST on sale of liquor:

Smoking and drinking are harmful and equally undesirable. If I increase tax on cigarettes and leave out drinking, it may be considered discriminatory. Sales of IMFL, beer etc carry a sales tax tag of 25%. I propose to enhance this rate to 30% under the J&K GST Act.

Tax on Services under GST Act:

I have been reviewing the list of Services, covered by the J&K GST Act, from time to time. Last year, I had added six more services to the list. I now propose to add the following three more services to the list to be brought under the tax net:-

    (i) Security and Placement Services,

    (ii) Pandal and Shamiana Services,

    (iii) Annual Maintenance Contracts.

Revision of Toll rate:

As the Honorable Members of this August House are aware, Toll is not an ad valorem tax. As the cost of collection of toll keeps on rising, it is prudent to keep on adjusting the rate of Toll. In consideration of this factor, I propose a modest increase of five paisa per kilogram in the existing rate of Toll.

Taxation law is continuously evolving. Its administration, sometimes, leads to conflicting interpretations and requires a conciliatory effort on the part of the tax administrators and the registered dealers to resolve such issues, as they arise. Complicated procedural issues may, sometimes, necessitate changes in the prescribed procedure. With a view to creating an institutional mechanism for this purpose, I propose to constitute a Grievance Redressal Committee, comprising all the concerned senior Government functionaries and representative of trade bodies, to undertake such redress exercises periodically.

Financial relief in identified sectors:

The Government has been continuing with its employee friendly policy, as has been amply exhibited so far. We shall continue to do so in future as well.

The present rate of remuneration, payable to the teachers, engaged under the ‘Rehbar-e-Talim scheme’, is rupees 1,500 per month. After the expiry of two years, they are paid rupees 2,000 per month. These teachers are rendering valuable services to the society in the field of education. In recognition of their valuable services, I propose to enhance their remuneration to a uniform level of rupees 3,000 per month from the next financial year.

‘Nambardars’ and ‘Chowkidars’ are being paid a monthly remuneration of ì 501 per month and ì 500 per month, respectively. These rates have been in operation since 1.4.2007. In recognition of the services, which they have been rendering to the society, I propose to increase their remuneration to  ì 751 and ì 750 per month, respectively, from the next financial year.


Consolidation of peace always opens up ways to progress and prosperity for the people. The current year has amply proved this. Now is the time for the people of the state to reap the dividends of peace, as has been stated by our honourable Chief Minister, Janab Omar Abdullah Saheb. It is our duty to nurture the present climate of peace and momentum towards growth. Let us join together in this effort, regardless of our political ideology and irrespective of our assigned roles in this August House.

With these submissions, I commend the Annual Budget 2012-13 to this August House.

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