The Central Government is set to grant Rs 8,820 crores to the newly created Union Territories of Jammu & Kashmir and Ladakh to boost their economy and give impetus to development.
According to officials, the grant of Rs 8,820 crore is in lieuof 14th Finance Commission Award which was sanctioned for the erstwhile Stateof Jammu and Kashmir. The erstwhile State was estimated to receive Rs 1,25,000crore from the Centre during five year award period 2015-16 to 2019-20 of the14th Finance Commission.
"Union Finance MinisterNirmala Sitharaman has presented Rs 8820 crore worth first batch ofSupplementary Demands for Grants in both Houses of Parliament for newly createdUTs of J&K and Ladakh in the remaining months of current financial year 2019-20,"said a senior Finance Department official.
"J&K and Ladakh will get the funds once both Houses ofParliament pass the grants tabled by the Union Finance Minister," the officialsaid.
The Centre transfers 42 percent of the total taxes itcollects to States as per the recommendations of the 14th Finance Commission.Among the States, Jammu & Kashmir's share was 1.854 percent of total taxesdevolved. The award of the 14th Finance Commission is for a five year periodending 31 March 2020.
The powers of presenting grants for the UT of J&K arevested with the Central Government in absence of the Legislative Assembly. Incase of UT of Ladakh, which as per the J&K Re-organisation Act hasn't beengranted Legislature, its financial requirements will be met by the CentralGovernment.
Meanwhile, the Central Government has extended the term of15th Finance Commission by 11 months as it needed time in the wake of change ofstatus of Jammu and Kashmir State, which was divided into two Union Territorieson 5 August.
Term of the FinanceCommission, scheduled to end on November 30, has now been extended till 30October 2020.
As a State, the size of Jammu and Kashmir Budget for 2019-20stood at Rs 89,819 crores. So far, J&K like all other States, used toreceive a share in the devolution of taxes collected by the Central Government.However, post downgrading of J&K into two UTs, it is not eligible toreceive finance commission award, but the Central Government has asked the 15thFinance Commission to include J&K into its scheme of things so that it canget financial award for the next five years.