10 Critical Concerns

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Preparation of budgetary proposals is always a difficult and thorny task. However, I will be missing an important aspect of my duty if I do not bring out some of the uniquely adverse factors which converged in the current financial year to make my job more complex than ever before. I take them briefly, one by one.

Firstly, the rate of growth of our GSDP and our per capita income which used to be ahead of all India average, six to eight years ago, have fallen behind and consistently remained below the national average afterwards.

Secondly, the gap between expenditure incurred on purchase of electrical energy and revenue collected has nearly doubled from Rs.767 crore during the year 2003-04 to Rs.1,406 crore during last year.

Thirdly, the fiscal deficit touched a high of Rs. 2,666 crore, during the year 2007-08.

Fourthly, in a normal situation we should have received Rs.200 to Rs.250 crore more in the current year on account of our share in the central taxes. It has been, instead reduced by about Rs.105 crore in the current year due to economic slow down.

Fifthly, during the 4 year period given by the Twelfth Finance Commission, the government did not meet the FRBM targets by the prescribed dead line which was 31 March, 2009. Therefore, we have been denied debt relief estimated at Rs.473 crore recommended under the Twelfth Finance Commission Award. We also lost an amount of Rs.229 crore as the government did not hold Panchayat elections. Further, the revenue gap grant for the current financial year available under the Award is about Rs.100 crore lower than the revenue gap grant received last year.

Sixthly, plan revenue expenditure of nearly Rs.1200 crore was shifted to non plan during a three year period commencing with 2006-07. For this purpose plan resources were also transferred to non-plan. These transfers now form part of the non-plan gap as no additional resources were mobilized during these years specifically to take care of this additional burden.

Seventhly, a huge amount of Rs.917 crore due for payment to National Small Savings Fund (NSSF) on account of loans taken by the State Government was not provided for in the relevant financial years. The Government then borrowed from the market to clear the liability. The burden of this additional borrowing has fallen on the subsequent years including the current one.

Eighthly, funds received from various Ministries in Government of India under Centrally Sponsored Schemes were not authorized in time and got temporarily re-appropriated towards meeting non-development expenses. We have identified, authorised and revalidated about Rs.550 crore in the current financial year to make up for the previous short falls and thus restored our credibility before the concerned Ministries. Obviously, it has resulted into additional strain on our current year’s budgetary resources.

Ninthly, the three year life of Power Reform Grant amounting to Rs.1300 crore per annum given by the Centre to the previous government came to an end on 31 March 2009. No such grant is now available in the current financial year.

Tenthly, and the most importantly, Sixth Central Pay Commission report has also fallen in our way in the current financial year. The Government has to bear an additional burden of Rs.1067 crore for the 8 months of the current financial year on account of increased salaries and pension.

Hon’ble Members can well imagine as to how daunting the challenge was for our young and dynamic Chief Minister, Hon’ble Janab Omar Abdullah Sahib to convince the Central Government to determine a liberal annual plan outlay for our State against its highly eroded resource base which we inherited. I am happy to report that his efforts have yielded  the desired results and the Planning Commission have formulated a massive plan of action which may enable us to access development expenditure upto Rs.10,000 crore under various programmes.

As Hon’ble Members are already aware, the State Plan outlay has been fixed at Rs.5500 crore in comparison to Rs.4500 crore of last year indicating a 22.22% jump in money terms. In real terms, the increase is much more if we take into account the transfers made from plan to non plan. The State plan outlay has been topped by a provision of Rs.1200 crore under PMRP.

For the first time, we have proposed the highest ever allocation of Rs.643 crore to meet 100% requirements of the State share for various centrally sponsored schemes which will enable us to access about Rs.1800 to 1900 crore of the central share. A sum of Rs.220 crore provided under PMRP as counter part state share will enable us to raise matching World Bank loans under Economic Reconstruction Agency (ERA). The flow of funds under various Central mega flagship schemes like JNNURM, NRHM, NREGA, SSY, RGVY etc shall be over and above the figures mentioned by me.

What is more important is the fact that the resources for funding the state plan outlay, Centrally Sponsored Schemes and other programmes have been fully tied up and thus the current year’s plan is fully funded.

We are thankful to Hon’ble Prime Minister of India, the Union Finance Minister and the Dy. Chairman, Planning Commission of India and his colleagues for generously appreciating our needs. I am sure this House too will share the state government’s gratitude on behalf of our people. The current year’s plan outlay and other allocations are a clear affirmation of the Hon’ble Prime Minister’s resolve to turn Jammu and Kashmir into a model State

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About Author

A journalist with seven years of working experience in Kashmir.

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