Jammu and Kashmir in ‘debt trap’
Jammu and Kashmir's debt has piled up with revenue generation continuing to remain a problem, raising concern over the fact how the government will be able to liquidate its total debt of Rs 83,573 crore. As per the official figures, the total debt of Jammu and Kashmir are Rs 83,573 crore in 2019-20. In the corresponding fiscal, the total debt was Rs 79061 crore which means an increase of Rs 4512 crore during the last fiscal year.
As per the officials , J&K 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.
In 2016, regarding the erstwhile State government signing MOU for participation in the Government of India's "UDAY" scheme, economist Prof. Nisar Ali while commenting on the issue said "problem is that the revenue generation of J&K has not improved, our key contributors of GDP has not shown any increase instead they have shrunk.
"Though it was believed that after the abrogation of Article 370, the central government may write off all the debt of J&K. However so far nothing has been done in this direction" Prof Ali said.
In comparison to 2011-12, Rs 36,256 crore J&K's liabilities have witnessed an increase of over 100 percent in the last nine years. In 2012-13 liabilities recorded were Rs 40,248 crore, 2013-14 Rs 44,646 crore, 2014-15, Rs 48,314 crore, Rs 2015-16, Rs 55,346 crore.
A senior finance department official said that there is "nothing to worry" about the total debt. "Our debt is far lesser as compared to other top states who have five times more GDP than ours. There is nothing to be concerned about. The J&K administration has introduced many reformative measures which will help in decreasing the interest payments and other liabilities."
"Recently the government signed an Memorandum of Understanding for liquidating power liabilities, we are paying interest on these liabilities at higher rate of 18 percent, it will have us save this interest outgo." the official said.
Finance Commissioner, Finance department, Dr. Arun Kumar Mehta said " Budget 2021-22 is a realistic budget, the increase in expenditure means that the government is spending more on developmental activities."
Union Finance Minister, NirmalaSitharaman in her Budget speech had stated that Budget 2021-22 "for J&K shall focus on good Governance aimed at maximum governance and minimum government, socio-economic development of the people, development or infrastructure across J&K and generation of employment which is our priority."
"The budget for 2021-22 for J&K shall again cross Rs.1 lakh croremark, an indicator for our commitment to make J&K a model of development. The total budget estimates for the fiscal is Rs.1, 08,621crore, of which developmental expenditure is of the order of Rs.39,817crore. The capital component of the budget has increased substantially. The expected revenue receipts are Rs.97,141crore whereas revenue expenditure is expected to be Rs.68,804 crore thereby making available revenue surplus for capital expenditure to the tune of Rs.28,337 crore," the speech had stated.