Main Features of Budget
This budget moves from the conventional Public Administrative Budgeting to a cutting edge Public Management Approach. The structure of the budget has been given a developmental rather than a purely administrative orientation. The new approach“Budget Estimation, Allocation and Monitoring System” (BEAMS), online computerized system to distribute the budget and to authorize expenditure. The Treasury System to be replaced by a functionally aligned Pay and Accounts Office (PAO) System. Budget control mechanism of audit and invoice checking strengthened at the department level. Integrated Financial Management System (IFMS) for online bill processing.
1) Plain speaking on wasteful government
J & K, along with Bihar, Himachal Pradesh and Delhi, spends more money on revenue expenditure—which includes salaries, pensions, interest payments and other money that the government spends on itself—than on capital expenditure to build assets and other infrastructure for the people, according to a state-budget analysis by the Reserve Bank of India.
The financial year 2011-12 was a year of high capital spending for all the three states. However, in the following years, 2012-13 and 2013-14, it is clear that revenue expenditure is far higher than capital spending in the three states as well as Delhi. This means governments that spend more on themselves than on the people they govern.
2) Simple accounting: income & expenditure
It’s very easy to understand where the money is coming from and where it will go. Gone are those bewildering terminologies beloved of Indian financial babudom, such as plan, non-plan, capital, revenue and non-revenue.
Starting from the last fiscal year, 2015-16, the budget will have only two parts: receipts and expenditure.
The expenditure budget will, in turn, have only revenue and capital expenditure estimates. The entire old classification of the plan and non- plan has been removed. This is a major change which has far reaching implications on the allocation, efficiency and monitoring of public expenditure. This change will demystify the budget to a great extent.
Now there will be two categories of expenditure such as, current and capital; the former being what is spent to meet our daily expenses and the latter is what is spent on making assets on the ground. In the years to come, the state can start the mapping of asset creation with money that has been spent.Source: J&K Budget, 2015-16
3) Protecting the vulnerable: small businesses, farmers, women
The finance minister has balanced fiscal responsibility with subsidies and handouts that could allow vulnerable people in his flood-ravaged province to become self-sufficient.
4)Taxing services to increase revenue
The finance minister intends to balance dole handouts with new sources of revenue.J&K is the only state in the country that has the power to tax service.
By virtue of the Goods & Services Tax (GST) Act, J&K has the power to tax both goods and services. All other states of India have the power to tax only goods.
The moot point is that J&K is a special taxation area. According to latest estimates, service sector constitutes 57% of the GSDP (gross state domestic product), its contribution to the state exchequer is next to nil. So far, we have not been able to tap the entire potential of this sector.
So, included under the tax net now are advertising agencies, security services, placement services, salons and health clubs. This should generate Rs 150 crore.Services make up nearly 60% of India’s gross domestic product, and services are taxed in India based on the negative list regime (not covered under service tax act including services provided by central/state governments and RBI).
5) A budget for the main economic bottleneck—electricity
The finance minister also presented a power budget for J&K, a first for any Indian state, most of which face economic bottlenecks because of electricity shortages.
The power-sector development held the key to fiscal autonomy through 24×7 reliable and affordable power to all domestic, commercial and industrial consumers” and “unleashing of a new era of development.
The state faces a peak deficit of 22%. Electricity demand is 2,657 MW in 2014-15, of which only 2,050 MW is likely to be met.