Jammu and Kashmir finance minister Haseeb Drabu today said a prudent public expenditure policy will play a growth-inducing role in stopping the economic slowdown.
Due to the economic slowdown and the absence of private investment, public expenditure policy will play a growth- inducing role in reinvigorating the economy.
Although options are limited but they do exist in the form of investment or stimulus package, Drabu said at a preparatory meeting of the Finance Department officials for Budget (2018-19) here.
He said in the context of Jammu and Kashmir, the irrational policy of making provisions for spending on asset creation without factoring in the budgetary allocation results in liabilities and a directionless expenditure policy in the long run.
The government is re-looking at the ways of spending money and reorienting the way of thinking about budget, which triggered this exercise, the minister said.
Earlier, there used to have 29 heads for demand for grants with no meaning from public expenditure policy point of view. Now, these have been combined into five sectors of demand for grants to give them some meaning, Drabu said.
He said he had very fruitful meetings with his cabinet colleagues on resource allocation for Administrative Services, Infrastructure Development, Social Development, Economic Development and Finance.
He said the state budget will become a pure public expenditure document in coming years.
Drabu said the focus of next year's budget will be on completing the existing projects and maintenance of capacities.
"Identify the projects pending from last more than 10 years, those pending for between five to ten years and the ones which are being executed for less than five years. You work out the cost of completion so that the finance department can take a view. If you can complete even half of the existing projects, it will be a huge achievement for the government," he said.
Instead of taking last year's budget and giving the figures a 10 per cent hike, break the expenditure allocation to align the expenditure with the priorities of the minister.
The finance minister said the spending capacity of Jammu and Kashmir is limited and there are enormous institutional constraints and leakages due to which the outcome of public expenditure in the form of asset creation is limited.
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