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| New FM shelves plan, non-plan system | | | JAMMU: Ex-Journalist and ex-Chairman of Jammu and Kashmir Bank Dr. Haseeb Drabu in his new avatar as Finance Minister of PDP-BJP coalition government presented a zero deficit budget but shelved entire old classification of plan and non- plan, replacing this with only two categories of expenditure i.e. current and capital. An ace economist, Drabu presented separate power budget. Justifying the discarding of old practice of Plan and non-plan budget, Drabu in his budget speech said that this is a major change with far reaching implications on the allocation, efficiency and monitoring of public expenditure. He further said that this change will demystify the budget to a great extent.
Drabu maintained that there will now be only two categories of expenditure, 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. He said that the new budget scheme would help in mapping of asset creation with money that has been spent. Referring to the past practice, Drabu said that plan and non-plan classification made it impossible to find out where the money has been spent and the new classification would now make it easier.
Finance Minister further said that the new method of allocation of funds for both capital as well as current expenditure would provide members of the two houses of state legislature details of the physical assets created on the ground by the money allocated and spent by various departments of the state government. State would formulate its own scheme of financing the state budget under the new budgeting system.
Drabu said that the Fiscal Responsibility and Budget Management (FRBM) Act would be changed next year to ensure that over the next three years, borrowings are used only to finance creation of capital assets. Drabu claimed that the new system is so formidable that the large number of government servants who would have to wait for months together to get their salaries under plan head, will not have to wait any longer. By shifting all the plan revenue expenditure onto the revenue side from 2015-16, Drabu said that the hardships of these employees will be a distant memory.
Drabu informed that all resource transfers from the centre to the state are now in the form of Finance Commission transfers. The plan transfers decided by the erstwhile Planning Commission have now been subsumed under those of the finance commission. As such, share in taxes, statutory grants, and plan grants are now a part of the finance commission transfers and hence statutory. All discretionary grants have been abolished. |
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