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| Central devolution to J&K increased | | | Early Times Reporter
Srinagar Sep 4: Central devolution to J&K has increased significantly during the last financial year. So have loans, debts and the overdraft from J&K Bank, state legislature was informed. In a written reply, the government informed the house that state received Rs 8,611.58 crore in 2006-07, which is comparatively higher than Rs 7,206.23 crore that it got during 2005-06.
The devolution included a non-plan revenue deficit grant of Rs 2,446.64 crore and a Rs 1,317.78-crore share from central pool of taxes. Other major entries in the devolution included Rs 1,000-crore power reform grant, besides special plan assistance of Rs 765.45 crore that envisages part of the prime minister’s reconstruction plan.
But the hike was on all fronts. It lifted loans worth Rs 1,006.99 crore in 2006-07, a huge increase from Rs 612.89 crore, a year earlier. Surging requirements of the state made it to rely heavily on overdraft from J&K Bank that was to the tune of Rs 1,979.64 crore in 2005-06 and Rs 2,119.19 crore in 2006-07. The government paid an interest of Rs 131.81 crore on overdraft in 2005-06 and Rs 202.40 crore last fiscal.
This has shot up the indebtedness. Though public debt is well over Rs 22,000 crore, the government informed the house that the amount of total outstanding loans stood at Rs 13,002.57 crore at the end of last fiscal, up by Rs 555 crore a year.
Interestingly, the state government is continuously failing to manage expenditure of the entire corpus of fund coming to the state under the centrally-sponsored schemes. Against the availability of Rs 1,045.46 crore in 2006-07, the actual expenditure reported was of the order of Rs 655.34 crore (62.68% of the available fund). In 2005-06, the state could spent only Rs 665.83 crore, using just 52.33% of the available fund of Rs 1,272.43 crore.
Situation in 2004-05 was better when Rs 456.57 crore of Rs 711.13 crore were spent — expenditure of 62.40%. Under-utilisation, officials in the planning ministry say, owes more to delayed devolution and strict observance of codal and technical procedures rather than absorption capacity.
J&K that has a narrow resource base — mostly VAT, excise and certain services and royalties — manages almost 80% of its requirements from the central government. However, it has increased realising the outstanding taxes. At the end of the last fiscal, Rs 742.77 crore were outstanding on account of various taxes, after recovering Rs 8.34 crore from defaulters.
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