Stating that over Rs 500 crore given to the Jammu and Kashmir Bank was not a "bailout package" but a capital, the state government today said that there will be no breach of the autonomy of the bank.
"Whatever credibility I have in this House and elsewhere, I would like to assure you that there shall be no breach of the autonomy of the J&K Bank. The Rs 580 crore should not be seen as a bailout but a necessity, a capital has been provided (to the bank)," state Finance Minister Haseeb Drabu said while replying to the budget debate in the Legislative Assembly.
He said in the past five years the bank has given a dividend of Rs 502 crore to the state government and the government has now infused the capital in the bank as it was under stress.
"People talk about the bailout of the J&K Bank, about autonomy. The RBI has regulatory norm which govern the public or the private banks. If you go by the banking classification, then J&K Bank is a private bank, it is not a public sector bank. It's a private bank headed by the J&K government.
We are the only state government to have a bank", Drabu said.
He said the norm of RBI say that the bank should have a regulatory deposit of 13 per cent capital adequacy.
"In the last 4-5 years, NPAs were created which resulted in the decrease of the capital adequacy of J&K Bank and it could have happened that the RBI could stop the lending operations so it was necessary to infuse capital to the bank," the finance minister said.
He said the bank has accurate NPAs of Rs 2,000 to Rs 3,000 crore which were created in the last one quarter.
"If we see the lending pattern in the country in the last year, the Government of India earmarked Rs 2.5 lakh crore for banks which included the State Bank of India. It is not unusual for governments to give money to the banks. I said in my speech that there was a governance failure, but I would like to say that banking is out of state legislature," he said.
He said the J&K Bank belongs to the state and as the Chairman of the bank for five years he was treated very well.
"I was given full autonomy to function, I worked under three governments and all three governments gave me enormous support," he said.
While welcoming the broader consensus reached in the house
regarding various reform initiatives in budget 2017-18, Drabu said it marks the beginning of a progressive trend with the members in agreement that there has to be a tangible roadmap for the economic development of the state.
He said the government is aiming at streamlining the expenditure under the current budget with systematic spending initiatives, adding that the reforms introduced in the budget are first steps towards bringing economic stability in the state.
"The government has benefited from the exhaustive discussions on the budget proposals and various valid points have been made by the members during the debate," Drabu said.
He said the contribution of the members would come handy in the successful implementation of the reforms and initiatives proposed in the budget.
Responding to the points raised by the legislators, Drabu said the first budget presented by this government focused on macro-budgetary matters wherein the fiscal strategy was outlined. In the second one, attention was paid to distributive issues pertaining to allocative efficiency.
He said present budget focuses on the micro-budgetary reforms, operations of government programmes and executing agencies.
"This budget is devoted to improving the operational efficiency of spending.
"We may have political and ideological differences but during the discussion on the budget all the parties came together with their progressive inputs aimed at development and growth of the state," he said.
He said that such discussions are essential for successful implementation of economic reforms and policies in the state, and it strengthens the basics of constructive dialogue and debate.
Drabu said that the funds allocated under this budget will be released on time and all the formalities will be done in a time-bound manner.
Enumerating the main proposals of the budget, Drabu said an effort has been made to streamline and speed up spending of government resources for which a time-frame has been set for release of funds.
He said 50 per cent of funds under the Revenue and Capex budget will be released to various departments by February 10, 2017 for expenditure to be made from April 1, adding that it will have great impact on efficient and effective utilisation of funds. For the first time, a legislative approval will be sought for the release of said funds.
To overcome the difficulties and shortcomings of current process of budgeting, releasing, and distributing the budget within the government authorities and booking the expenditure against the budget, this budget proposed computerised budgeting system known as 'Budget Estimation, Allocation and Monitoring System' (BEAMS). In next few years, complete change can be witnessed in the whole budget system, he said.
The Finance Minister said the proposal to move away from
the old system of Treasuries to Pay and Accounts Offices (PAO) will also help in removing delays and plug leakages in the system.
Speaking about the security cover to crops against damages from natural disasters including hail, floods and drought, Drabu said the government has formulated a comprehensive insurance scheme for nine crops for which the provision of Rs 75 crore in the budget has been made for the purpose of premium subsidy.
Similarly, assets of public importance, government buildings and vehicles will be provided insurance cover.
Creating a social security system for all the registered construction workers in the state is a major initiative for the welfare of the working class, which will also push financial inclusion and the DBT system, he said.
Drabu added that by providing insurance cover to these workers, the government will be covering almost 15 lakh families under the scheme.
The Finance Minister said that the Public Enterprise Reforms proposed in the budget are necessary for their growth and stability. "This budget has initiated the financial re-engineering of the PSUs which had been promised by this government," he said.
Speaking on the issue of GST, he said that the government is working out the modalities regarding implementation of the new regime in GST Council meetings.
"We will look in which form we accept it in our state," he said and added that GST is beneficial for everyone and Jammu and Kashmir will examine it closely so that it gets the best out of it.
Drabu said Union Finance Minister Arun Jaitley, as the chairman of GST Council, has taken a cooperative federalist approach towards financial governance and has actively involved and taken inputs from the state Finance Ministers during the financial policy formulation processes and pre-Union Budget discussions.
Responding to the issue of waiving off the KCC loan, the Finance Minister said that payment of first tranche has been made to 74,265 identified borrowers.
"By March 31 this year, Rs 250 crore allocated for KCC loan waiver will be distributed to cooperative banks, J&K Grameen Bank and other banks," he said.
Responding to the issue of regularisation of the casual workers of various categories, Drabu said the process will start in the course of the next financial year and the government is committed to address this social issue on priority.
With regards to the issue of pay anomalies, he said the government will undertake extensive review to address this concern.
Addressing the issues raised by the legislators regarding lack of attention paid to Ladakh region, he announced Rs 2 crore each for Leh and Kargil to clear its past liabilities besides making provisions to include local crops like barley and apricot under the Crop Insurance Schemes.
