JK headed for financial crisis

Fiscal situation worsens as annual plan is nowhere in sight; Liabilities at treasuries swell to Rs 400 crore

Jammu and Kashmir government is in for severe financial crisis owing to the inordinate delay by the government of India in the finalization of the state’s annual plan for 2014-15.
Sources told Greater Kashmir that the unwarranted delay in plan finalization and its subsequent devolution by the government of India has hit JK “badly” on the development front as its coffers are running dry.
“If the fiscal situation continues to be same for the coming few weeks, J&K, having a limited working season in Kashmir and some parts of Jammu, would witness a total financial crunch and subsequent development freeze for the current year,” sources said.
The State Government had in its budget for 2014-15 projected the plan size of Rs 11,900 crore including Rs 7300 crore main plan, Rs 4000 crore assistance under Centrally Sponsored Schemes (CSS) and Rs 600 crore assistance under Prime Minister’s Reconstruction Plan (PMRP).  
But, sources said, J&K is clueless when New Delhi would approve the plan, and with the budget session of Parliament ending on August 8, there is no hope of a decision on the matter in near future.
“The Government is trying to manage the situation with the state’s own resources but it is a temporary arrangement which won’t last long,” said a senior official. “We apprehend the panic buttons will be pressed soon, if the plan approval gets delayed further.” Sensing the precarious situation, the government had authorized 50 percent expenditure of plan till the District Development Boards would take a call on the plan allocation for respective districts. 
“But this short-term arrangement can’t sustain longer due to non-release of the plan funds,” the official said. 
Another worry for the Government is that in case of enforcement of the Model Code of Conduct for the State Assembly elections scheduled in November-December this year, there would be almost complete development freeze in the state. The Election Commission of India has already set the election process into motion with the revision of the electoral rolls.  
“Once the Model Code of Conduct is enforced it will put a halt on decision making and hence the already limited development season of J&K will be cut short by at least two to three months,” the official said.
Besides, the New Delhi is yet to decide on whether to set up the Planning Commission which would have authority to approve plan size or handover the responsibility to the Finance Minister.
“This time we have no idea whether the projections made by the State will be cleared in toto or the State will face cut to overall plan size. This is another big worry for the State Government,” the official said.
Last year the State had project Rs 8000 cr annual plan size, however the Planning Commission had approved only Rs 7300 crore. 
The delay in approval of the plan is already showing its impact on the State’s economy with non-availability of funds at Government treasuries leaving government employees and contractors fuming.
A treasury officer on condition of anonymity told local news gathering agency CNS that treasuries across Kashmir are having liabilities of more than Rs 400 crore owing to which government employees, pensioners and contractors are suffering for release of their dues.
“Daily wagers aside, even the permanent employees form Social Welfare, Education Department, Urban Local Bodies, and ISM staff are without salaries,” he said. 

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