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| JK sets to face major economic crisis by 2024 | | Revenue surplus of Rs 7,595 cr converted to revenue deficit of Rs 4,859 cr; Fiscal deficit increases from 2.1 to 8.4% | | Peerzada Ummer
Jammu, Apr 15: Jammu and Kashmir by the year 2024 is likely to face a tsunami of economic crisis with UDAY bonds of Rs 12.5 thousand crore likely to be paid by the government to clear the past liabilities.
Documents in possession of Early Times reveal that the maturity profile of Outstanding Public Debt has showed that Rs22,971 crore (53 per cent) of the total outstanding debt of Rs 42,981 crore was in the maturity bucket of up to seven years and the balance Rs 20,010 crore (47 per cent) from seventh year onwards. The erstwhile state, as per the documents, will have to repay market loans and UDAY bonds of Rs 12,543 crore (36 per cent of total outstanding market loans and UDAY bonds of Rs 34,484 crore) along with interest of Rs 11,653 crore during next five years up to 2023-24. Balance Market loans and UDAY bonds of Rs 21,941 crore will have to be repaid in subsequent years up to 2031-32 alongwith interest of Rs 5,493 crore. This means that the State will have to make repayment of Rs 4,839 crore annually during next five years. Market loans and interest thereon (including interest on UDAY bonds) repaid during 2018-19 was Rs 4,306 crore.
Revenue Receipts and Revenue Expenditure have grown at an annual average rate of 13.91 per cent and 17.07 per cent respectively in the past ten years. Audit reports have observed that applying these growth rates, and assuming that the Revenue Receipts and Revenue Expenditure maintain the average growth rate of last ten years, Revenue Deficit during 2021-22 works out to Rs 13,925 crore. The State is committed to repayment of Principal of UDAY Bonds from the year 2021-22. Borrowings during that year projected at the average annual growth rate of last ten years (19.17 per cent) would be Rs 42,878 crore. After meeting the debt liability of Rs 40,695 crore (including repayment of UDAY bonds Principal of Rs 214 crore) falling due for repayment in 2021-22, borrowed funds would fall short of bridging the revenue gap by Rs 11,741crore. The State would thus have to resort to additional borrowings to meet its liabilities from 2021-22.
Documents reveal further that the capital expenditure of the State has hovered between 13 to 20 per cent during 2014-19. Revenue surplus of Rs 7,595 crore in 2017-18 converted to revenue deficit of Rs 4,859 crore in 2018-19 on account of implementation of Seventh Pay Commission. The Fiscal deficit also increased to 8.64 per cent of GSDP in 2018-19 from 2.01 per cent in 2017-18 primarily on this account. This will, as per the scrutiny of the records, impact revenue flows in the future which will in turn impact the primary balance. Moreover, other factors such as public account liabilities and force majeure events- Like current Corona Virus crisis and its effect on GSDP, and any other unanticipated loss of revenue also have to be reckoned in assessing the debt sustainability/stability of the State as these cannot be anticipated or determined statistically; they have not been factored in the analysis. |
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