State Plan - Annual Plan 2009-10 PDF

Annual Plan 2009-10
Development, in its comprehensive sense, is the most important National Objective and has been vigorously pursued through the process of the Planning. Planning essentially involves identification of priorities and allocation of resources for their attainment. Economic development is the direct outcome of the investments made under public, private and cooperative sectors. Public sector investment will continue to play the pivotal role in development of country in spite of the expansion of private sector. However, public, private and other sectors will have to complement each other to achieve the common and fundamental objective of development.

The Annual Plan size has been increasing over the years to meet the needs of development of growing  population and for incremental reasons.

Annual Plan outlay for 2008-09 has been approved at Rs.4500 crores. In addition, Rs.1012.97 crores have been approved under Prime Minister’s Reconstruction Plan (PMRP). An expenditure of Rs.2932.99 crores has been incurred upto end of Jan. 2009, which amounts  to  53.20% of the outlay (expenditure is likely to increase by the end of financial year substantially). The expenditure in the first two quarters of the financial year is normally low due to following reasons :-

Time taken by the  District Development Boards to approve the respective Annual Plans of the District (the district component constitutes about 35-40% of the total outlay).
Procedural matters like invitation of tenders, scrutinizing the proposals by Purchase Committees, accord of technical sanctions and administrative approvals  etc.

The expenditure,  picks up during 3rd and 4th quarters of the financial year. The Government has taken several measures to ensure that the time lost in procedural matters is reduced to the minimum. The finalization of the Plan Allocations for different sectors before the beginning of the financial year is one major step taken in this direction. Process of sanctions and releases has also been improved.

The 10th Five Year Plan of J&K was oriented to achieve a growth rate of 6.10% in Gross State Domestic product (GSDP) at constant prices. The actual growth rate  at constant (1999-2000) prices has been 5.13% in 2002-03, 5.17% in 2003-04, 5.23% in 2004-05, 6.17% in 2005-06 and 6.25% in 2006-07. Average annual growth rate in the 10th Five Year Plan was  5.59%. However, at the National level the growth rate was 3.84% in 2002-03, 8.52% in 2003-04, 7.45% in 2004-05, 9.40% in 2005-06 and 9.62% in 2006-07 (advance estimates). The growth rate of GSDP has thus increased during the 10th Five Year Plan Period but has lagged behind the growth rate at the National level and growth rate of most of the States of the  Country.

The growth rate (at constant prices) of the State economy has been targetted at 6.5% for 2007-08. 7.5% for 2008-09 and 8% for 2009-10.

The GSDP of J&K State has been continuously increasing over the years. Gross State Domestic Product (GSDP) at constant (1999-2000) prices  for 2006-07 was estimated at Rs.21697.61 crores, as against Rs.20420.75 crores in 2005-06, registering an increase of 6.25% over the previous year.  The GSDP for the year 2007-08 has gone up to Rs.23060.48 crores, registering an increase of 6.28% over the previous year. The GSDP, at constant  (1999-2000) prices as per the preliminary estimates, for 2008-09 is estimated at Rs.24471.31 crores, which would be an increase of 6.12%, over the previous year.

The noteable feature of the GSDP at constant (1999-2000) prices is that the contribution of the Primary Sector which was 30.61% in 2002-03 has gone down to 28.11% in 2006-07 and further to 26.92% in 2007-08. Against this,  contribution of Secondary Sector has increased from 21.81% in 2002-03 to 26% in 2006-07 and to 27.2% in 2007-08, which is a healthy sign of the state economy. The Tertiary Sector contributes about 46% to the GSDP (45.88% in 2007-08).

The Annual Plan funding has been made more capital intensive by transferring the committed liabilities on account of Revenue component of the plan schemes to the Non-Plan. While it was not possible to transfer the entire amount in one go, the process was set in motion in 2006-07.Upto to the current year liability to the extent of about  Rs.1000 crores on this account has been transferred to Non-Plan. The year 2009-10 shall be having the relatively smaller  Revenue component in Plan Budget, that too largely for  expansion in the Health and Education Sectors and in such Sectors where expansion is needed.

Total level of investment under Annual Plan 2009-10 and PMRP is proposed at Rs.8911.62 crores (Annual Plan Rs.6500 crores & PMRP, Rs.2417.62 crores). The step up in the proposed outlay is 44% over the current year’s plan of Rs.4500 crores. Increase in the next year plan is mainly due to the following reasons:-

Increase in Capital Component:
We are proposing a step up of Rs.1685 crores in the capital component in the next year plan to take care of the state share for the AIBP scheme to the extent of Rs.489 crores. In case of  other Centrally Sponsored Schemes  we have proposed an amount of Rs.643 crores to provide for  the state’s matching share for CSS.

Land acquisition cost is proposed at Rs.106 crores for the next year against the present level of Rs.50 crores to remove the bottlenecks in major infrastructure projects.

Maintenance of the capital assets is proposed to be enhanced to Rs.346 crores from the existing level of Rs.100 crores.

Infrastructure for newly created districts is proposed to be provided with an allocation of Rs.117 crores from the existing level of Rs.115 crores.

Power Generation outlay is proposed to be enhanced by Rs.45 crores.

State share for Mughal Road is proposed to be increased by Rs.95 crores, following cost revision of the project.

Increase in the Revenue Component :
We are proposing  an increase of around Rs.315 crores in the Revenue Component during the next year raising it to the level of Rs.901.62 crores from existing level of  Rs.586.72 crores. This has been necessitated by regularization of staff created under various flagship programmes Increase in revenue is mainly on the following accounts:-

For regularization of Rehbar-I-Taleems Teachers we are proposing an increase of Rs.131 crores.16300 RETs have been engaged against which 9000 stands regularized so far.
Under Secondary Education Sector 3500 posts have been created salary component  is accordingly proposed to be enhanced by Rs.112 crores.
Increase in Salary component in respect of Higher Education for establishment of 24 newly set up colleges is proposed by an amount of Rs.16 crores.
Under Physical Education Sector increase in the salary component is proposed at Rs.37 crores.
Incase of Health and Medical Education more than 8000 posts have been created for which increase in salary is proposed by Rs.16 crores for the next year.
Scholarship for students of weaker sections is proposed to be enhanced by Rs.30 crores for the next year plan.

In respect of PMRP we are proposing an amount of Rs.2417.62 crores for the next year comprising Rs.1800.25 crores for completion of State sector schemes and Rs.617.37 crores for new projects.

One of the major challenges that the state has been faced with, is that of  creation of job opportunities for educated unemployed. The large investments are required in the public and private sectors to create job opportunities. Efforts will also  be made to promote self employment for educated boys and girls. The State Cabinet has decided to implement some innovative schemes for increasing the employment potential for educated youth. The State Government has constituted a high power employment mission to take over the responsibility of coordination between different departments and related institutions.

Till such time the mission is fully established to  restructure and integrate the plethora of schemes of Central and the State Governments, it has been decided to increase the level and extent of capital subsidy as well as to bring floriculture, fish farming, apiculture and rural transport under coverage of self employment schemes/programmes.

A new self employment scheme has been launched for the benefit of unemployed women and accordingly the Women’s Development Corporation will provide loans to the beneficiaries at an interest of 5% per annum. To begin with, about 100 women from each district would be selected under the scheme. Later, the number would be increased substantially.

There is a need to develop skills for at least 5000 to 10000 people so that they can participate in the BPO sector employment boom. To give a fillip to this and resultant employment in the sector, the State Government plans to set up a Center for skill enhancement in partnership with private players. The State will create  infrastructure and get private players to run the skill upgradation courses and for this purpose, cost of the trainings will be subsidized.

Because of the incentives provided the State and the Central Governments, investment in Industrial sector, has gained momentum. During  10th Five Year Plan, 126 industrial ventures have been cleared by the Apex Committee on project clearance constituted for this purpose. An investment of Rs.2650 crores is expected in these ventures and it is expected that these will provide employment to about 22700 individuals. Similarly,50470 small scale industrial unit have been registered ending March, 2008 and 419 units during 2008-09 (ending December, 2008). These have provided employment to 2485 persons.As already mentioned, the Revenue component under Elementary Education is proposed to be enhanced from Rs.81.15 crores to Rs.217.74 crores and under Secondary Education from Rs.18 crores to Rs.129.13 crores. This will take care of the regularization of Rehbar-I-Taleem Teachers and the expansion programme in respect of Educational Institutions.

A number of public sector undertakings are functioning in the State. Most of these have been incurring losses. The Government has constituted a high level committee to study the possibility of revival of these public sector undertakings. Rs.25 crores are proposed as Revolving Fund for implementation of the recommendations of the said committee.

Rs.96.02 crores is proposed as capital component for Industries and Commerce Sector in order to give a boost to the industrial development in the state.

Under Tourism, another thrust area of the state, capital component of Rs.114.66 crores is proposed against the current years level of Rs.84.15 crores.

Decentralized Planning in the form of District Planning will continue to get due importance. About 35-40% of the total Plan outlay will continue to be provided under District Plans to take care of felt needs  and aspirations of the people living even in remotely placed districts.

Women empowerment is proposed to be catered to by taking resort to Women Component Plan for implementing individual beneficiary schemes. Similarly, strenuous efforts will be made to provide sufficient funds for child development especially in sectors in which child development is an important component i.e in Health, Nutrition and Education (especially elementary education) sectors.

The State Government has decided to undertake rationalization and revamping of the planning process to make planning more meaningful and result orientated. Focus will be on consolidation, avoiding time and cost overruns and quality expenditure.

The State Government proposes to allocate Negotiated loans (as  part of the plan), to a few critical  sectors only, which have the potential to lift the loan and utilize it effectively, instead of spreading it amongst  many sectors.

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