Fin Dept releases 50% budget allocation for 2018-19 beforehand

Jammu, Feb 16: Keeping with the announcement made by the Finance Minister, Dr Haseeb Drabu in his Budget speech in the state legislature on January 11 this year, the Finance Department today released 50 percent of Rs 95666.97 crore budget allocation for the financial year 2018-19.
“We have today released to the Administrative Departments half of the total budgetary allocation of Rs 95666.97 crore for the fiscal 2018-19 through BEAMS (Budget Estimation, Allocation and Monitoring System) and they will have to now pass it on to the field Departments within four weeks,” Dr Drabu said here today.
Principal Secretary Finance, Navin Kumar Choudhary was also present on the occasion.
The new and proficient online system of resource allocation – BEAMS was launched by the Finance Department last year to ensure release of resources through quicker, transparent and efficient computerized mechanism.
Dr Drabu said the early release of funds would facilitate the Government Departments to plan and set into motion the developmental process for the next fiscal well in advance. “Earlier, the budgetary allocation used to be released by the Finance Department with the beginning of the new financial year in April while the Administrative Departments used to pass it on to the line departments in July-August resulting in developmental deficit because of limited working season available in various parts of the State,” he said.
The Finance Minister said with the introduction of BEAMS, once the budget is released, the departments can allocate funds to their executing agencies through the online system and thereafter all the expenditures will not only be regularly checked for budget availability but will also control monthly cash flows against pre-determined developmental targets. He said the substantial increase in the Capex budget has massively shifted the total percentage of expenditure towards development front. “In 2011-12, the rate of investment on public expenditure was 6.80 percent of the State Domestic Product (SDP) which has now crossed 10.02 percent in,” he said.
Pertinently, for the first time in J&K’s fiscal history, the Finance Minister has factored in wide-ranging Expenditure Reforms in the Appropriation Bill-2018 making the government legally bound to ensure time-bound public expenditure, avoid delays in execution of development works and reduce pilferages.
As per the new law, the Finance and the Planning, Development and Monitoring Departments have to release both Revenue and Capital budget to all the administrative departments within two weeks of the passage of the Appropriation Bill. The Appropriation Bill for 2018-19 was passed by the Upper House of the State Legislature earlier on February 5.
He said the administrative departments shall, in turn, ensure release of funds to the subordinate offices within four weeks of their receipt, failing which these funds shall be deemed to have been transferred to the intended DDOs on the dates they ought to have been released by the administrative departments /Controlling Officers. “Planning Development and Monitoring Department shall ensure that all plan allocations to be made in the next fiscal bear proper classification, indicating, name of the work/scheme against detailed Head-115 Works,” he said and added that in the absence of the schematic classification, the relevant Capex release shall be deemed as invalid and not open to being operationalization.
The Finance Minister said no payments shall be made by any Treasury/PAO from 1 April 2018, under any expenditure head, if the releases for the same have not been made and further received by the spending and bill passing Officers via BEAMS. “Treasury Officers/PAOs shall be personally liable for making payments on the funds released and received bypassing the BEAMS application,” he said.
Dr Drabu further said that the Planning, Development and Monitoring Department shall mandatorily upload on its website the department-wise “Name of the Schemes/Works/Projects”, forming part of the Capex budget for the fiscal 2018-19, along with the respective allocations.
He said the procurement plans of the departments for the next fiscal shall be limited by an outermost cap of 60 days, starting 1st April. “From conceiving the nature and quantity of public goods and services to be procured to preparing tenders/RFQs/EoIs to finally awarding the contract, the departments shall compulsorily finish the whole process by 30 May 2018,” he said and added that any spill-over in timelines shall be automatically visited with the appropriate disciplinary actions.
The Finance Minister made it clear that the funds shall be spent only on the approved items of the expenditure and strictly for the purpose they have been released. “There shall be no re-appropriation of funds except where the departments have spent 55% of funds received ending December 2017,” he said and added that however, where their spending levels are below 55%, the remaining 70% funds shall lapse to the Government.
He said the expenditure during the last quarter shall be restricted to not more than 30% of the Revised Estimates. “Treasury officers shall have an added responsibility to ensure that the departments are held responsible to the above expenditure ceiling,” he said.
Dr Drabu said the State Share of the Centrally Sponsored Schemes and the expenditure to be incurred on utility shifting, land compensation etc under PMDP projects shall be the first charge on the funds lapsing to the Government during the last quarter.
He said the expenditure reforms across the departments shall further be strengthened by initiating measures including bringing complete transparency in the financial and administrative processes through increased IT interventions, ensuring authorization of such works for execution only which have prior administrative approval, technical sanction and appropriate financial back up and ensure expenditure monitoring on real-time basis through BEAMS and PFMS.
Dr Drabu said this major expenditure reform follows slew of fiscal interventions made over the past 3 years aimed at making the public spending quick, visible and free from corruption. “This historic law will facilitate completion of projects within the approved allocations without time and cost overruns,” he said and added that it will infuse transparency in the public spending and prevent parking of public funds in the FDRs and, in certain cases, the personal bank accounts of the officers managing a maze of developmental agencies.
The Budget proposals for 2018-19 were, earlier, presented in the House on 11 January this year in which the Finance Minister had proposed 20% step up over the last year’s budget size of Rs 79472 crore.