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| J&K’s tax revenue plummeting | | Basic expenses remain uncovered; salaries, interest payments, pension alone cost Rs 27500 crore | | Early Times Report
Jammu, Sept 26: Jammu and Kashmir’s tax revenue is plummeting at a fast pace and is proving insufficient to cover the very own and prioritized expenses of the Union Territory. The official documents in possession of Early Times reveal that Jammu and Kashmir’s tax revenue in the previous financial year was not more than Rs 13898 crore. This amount as per the official records was not even enough to cover the committed liabilities of the Union Territory.
Records reveal that salaries, interest payments, pension and liabilities alone incur the cost of more than Rs 27,500 crore. This means the J&K had an estimated deficit of Rs 13602 crore to cover even the basic committed liabilities, leave alone building any developmental projects from its own revenue.
The UT’s share in Central Taxes and Grant-in-Aid is determined on the basis of recommendations of the Finance Commission. Further, the J&K’s performance in mobilization of resources is assessed in terms of its own resources comprising own tax and non-tax sources.
As per the official records, the actual collection under State’s Own Tax Revenue fell short by 19 per cent of the projections made by14thFC and four per cent of Budget Estimates. The actual receipts under Own Non-Tax Revenue were more by 354 per cent of the projections made by 14thFC but fell short by 18 per cent of Budget Estimates.
Furthermore, in order to ensure implementation of various centrally sponsored schemes in Jammu and Kashmir, an amount of Rs`22,702 crore was routed through State Budget as grants by the Government of India. In addition, there were more than 55 schemes involving a total amount of ` Rs 1,105 crore, which continued under direct funding mode by the Union Government to the J&K Implementing Agencies.
Also, there was increase of Rs 477 crore i.e.76 per cent in direct transfer of funds from Union Government to implementing agencies as compared to the previous year (Appendix 1.8). These funds are outside the budgetary and accounting system of the State Government.
In order to address the mounting revenue deficit, the 14th Finance Commission recommended increasing the States’ share of Central Taxes from 32 to 42 per cent.
Accordingly, the State’s share in the net proceeds of Central Tax (excluding Service Tax) was fixed at 1.854 per cent. The share of Union Taxes of `11,912 crore received during 2017-18 was `2,423 crore more as compared to 2016-17. The devolution as percentage of Revenue Receipts of the State’s share in Central Taxes increased from 15.27 per cent to 24.55 per cent during 13thFC and 14thFC.
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