Syed Junaid Hashmi
JAMMU, Oct 23: Be an ace economist or an experienced hand in finance or an accomplished lawyer; no Finance Minister of Jammu and Kashmir has been able to bring down the dependence of the state government on central resources.
Ex-Finance Minister Dr. Haseeb Drabu during his stint as economic advisor of PDP-Congress coalition government sold dreams of making Jammu and Kashmir self-reliant by bringing back hydroelectric projects from the then Congress-led UPA government. But neither he nor Muzaffar Hussain Baig nor even Abdul Rahim Rather could bring hydroelectric projects back from the central government, projects which are essentially with NHPC, a public sector undertaking of GOI and reduce J&K dependence on the central resources.
Audit report of the CAG on the finances of Jammu and Kashmir shows that Jammu and Kashmir’s dependence on the central government for funds has increased from 66 percent in 2013-14 to 71 percent in 2017-18. Though this is mere 5 percent increase in the dependence on the central resources but this reveals that despite claiming of having brought tremendous reforms, J&K’s finance ministers have failed the people of Jammu and Kashmir.
State’s Own Resources of Rs. 13,898 crore during 2017-18 was not enough to cover its committed liabilities (salaries, interest payments, pension and subsidies) of Rs. 27,500 crore. According to CAG, Jammu and Kashmir, being a special category union territory, had high share in central taxes and grants from the central government. And this the state’s dependence on central resources increased from 66 per cent in 2013-14 to 71 per cent in 2017-18.
Over the last five years, there was increase in the Total Capital Expenditure from Rs. 4,507 crore in 2013-14 to Rs. 10,353 crore in 2017-18. State’s Own Tax Revenue (SOTR) grew from Rs. 6,273 crore in 2013-14 to Rs. 9,536 crore in 2017-18.
Revenue Receipts increased by 15.56 per cent during 2017-18 over the previous year while Capital Receipts increased by 23.08 per cent during 2017-18 over the previous year. The substantial increase in Revenue Receipts was due to increase in State Share of Union Taxes/Duties and Grants-in-Aid.
The Grants-in-Aid increased by Rs. 2,104 crore from Rs. 20,598 crore in 2016-17 to Rs. 22,702 crore in 2017-18. The State Government is dependent on Grants-in-Aid from government of India to the extent of 47 percent of Revenue Receipts during 2017-18.
State’s Own Resources of Rs. 13,898 crore during 2017-18 was not enough to cover its committed liabilities (salaries, interest payments, pension and subsidies) of Rs. 27,500 crore. Committed expenditure on account of salary, pension, interest payment and subsidies constitutes 67 per cent of Revenue expenditure. Cash balance of Rs. 554 crore at the close of 2017-18 was lesser than the earmarked Reserve Funds amounting Rs. 2,164 crore which means that Reserve Funds were used for other than the intended purpose.
The increase in Development Capital Expenditure indicates that the Government is spending towards development works and creation of assets. The overall Fiscal Liabilities of the Government increased from Rs. 2,219 crore at the end of 31 March 2017 to Rs. 68,217 crore by the end of 31st March 2018. It is significant to note that fiscal liabilities at Rs. 68,217 crore were Rs. 1,578 crore more than the limit of Rs. 66,639 crore projected in 14th Finance Commission for the year 2017-18.
Internal debt of the State increased by 9.20 per cent from Rs. 34,266.75 crore in 2016-17 to Rs. 37,418.53 crore in 2017-18. The outstanding market loans as of 31 March 2018 was Rs. 26,019 crore which was 69.53 per cent of total internal debt of Rs. 37,419 crore. Market borrowings increased by
Rs. 4,802 crore (23.17 per cent) from Rs. 20,724 crore in 2016-17 to Rs. 25,526 crore in 2017-18. Net debt availability declined from Rs. 890 crore in 2016-17 to Rs. 29 crore in 2017-18.
The State’s Primary Deficit of `1,610 crore in 2016-17 converted to Primary Surplus of Rs. 1,885 crore during 2017-18. The State had a Revenue Surplus which increased from Rs. 2,166 crore in 2016-17 to Rs. 7,595 crore during 2017-18. State Government has met target of Revenue Surplus and Fiscal Deficit as per 14th FC targets. The Fiscal Deficit (FD) decreased from Rs. 6,177 crore in 2016-17 to Rs. 2,778 crore in 2017-18. The fiscal deficit at 1.97 per cent of GSDP was within the recommendations of 14thFC (three per cent).
