Govt seeks special dispensation for J&K from 15th Finance Commission

Advisor to Governor, KK Sharma Sunday urged Government of India to provide special dispensation to the Himalayan state of Jammu and Kashmir in 15th Finance Commission (FC) award.

Speaking at Conclave of Himalayan States in Mussoorie, Uttarakhand, the Advisor Sharma, according to an official spokesperson, said that Indian Himalayan Region States have some common issues to be addressed in the15th Finance Commission.

Union Finance Minister, Nirmala Sitharaman; Chairman, Finance Commission; VC, Niti Ayog among others were present in the Conclave.

“It’s an appropriate platform where we may adopt an integrated stand before 15th FC in respect of demands of our respective regions,” he said.  “15th FC is unique in itself as it comes in the context of few historical, fiscal and economic developments in the country as well as in the State. This is the first FC after the abolition of the Planning Commission and after the introduction of the GST,” Advisor Sharma said.

“In ‘Memorandum presented to the15th FC’—where we have presented a comprehensive picture of the various problems faced by our State which we would like the Commission to address in a sympathetic manner.”

 “Some States—who, provide higher revenue to the centre tend to claim a higher share. However, Finance Commission has to decide the formula and in order to maintain equity and parity, there has to be a tilt towards the worse-off States that would otherwise find it hard to develop,” he said. “Given our unique resources, a wealth of specialized talent and the rich traditions, the State has the capacity to bounce back and move forward steadily on the path of development and prosperity. Return of peace and rule of law for achieving these objectives and therefore we need the Commission’s full support in this endeavour.”

 “Jammu and Kashmir is the 5th largest State of India occupying 6.76% of the country’s geographical area. The State occupies 19th rank in population as per 2011 census. Population density is 124 and thus ranks 28th among other States/UTs. States with large areas need more funds to compete with those that have advantage in these areas,” he added.

 “The Climate Change is having a serious impact on the overall climatic conditions and its impact is visible in the form of receding glaciers, reduction in rainfall, intense heat wave and severe winters. Horticulture crops like apples are also showing decline in production due to decline in snowfall,” he said.

Giving details about the disaster management of the State, the Advisor said that it is very distinct from the rest of the country with respect to topography, economy, social setting and strategic location. The state is a multi-hazard prone region facing the threat of natural disasters like earthquakes, floods, landslides, avalanches, cloudbursts, high-velocity winds, snowstorms. “The existing funds are inadequate to undertake disaster mitigation/management activities. There is a need for continuous support system for undertaking risk analysis, mapping of vulnerable areas, works programmes, capacity building and coordination with national and international disaster management agencies,” he said. “There is also an urgent need to institutionalize the mechanism to effectively deal with the disasters and natural calamities in a coordinated manner at the time of emergencies. Funds amounting to Rs 715 crore are projected/proposed to set up and operationalise emergency operation centres, robust communication networks, decision support system and procurement of rescue equipment.”

About water bodies, the advisor said that for preservation of our most famous water bodies namely Wullar, Tsomoriri, Mansar-Surinsar and Dal lake special attention required. In our memorandum, we have indicated the extent of help that is required. This investment is crucial and unless the state is supported by a generous award of the Fifteenth Finance Commission, we would be risking posterity and its future.

The Advisor further informed that J&K contributes approximately 0.76 per cent to national GDP and ranks 21st in the list of contributing states. J&K State has a deficit budget which carries forward liabilities, debt non-sustainability and debt in perpetuity. The grant-in-aid from union government in absolute terms remains around 43 per cent vis-à-vis total revenue receipts and approximately 38 per cent vis-à-vis total expenditure. Major portion of the public sector investment goes to non-developmental activities around 40%. The private sector in J&K State is not much developed mainly due to infrastructural deficiencies like inadequate electricity, lack of railhead in Kashmir valley to connect with rest of the country and adverse law & order problem. J&K has been a special category state and depends on higher Central transfers for financing its revenue expenditure as it has relatively lower fiscal resources.

“We tried our best to comply with the guidelines of GoI and recommendations of the various Finance Commissions. Therefore, it necessarily requires special attention of the Finance Commission while deciding its Award for the State,” he said, adding “Our request to the Commission would be to be generous in supporting us.”

The Advisor invited the Finance Commission to visit the Jammu and Kashmir for profiling its developmental and financial scenario.