In my Wednesday column, I had noted that budget 2018-19 is old wine in new bottles, on a deeper examination; the jugglery of figures is evident. The budgetary figures have been needlessly hyped by including central schemes and Prime Ministers’ development programme in the overall estimates. This is meant to convey a false impression of state getting twice richer within a few years of Haseeb Drabu assuming the charge of finance ministry. He might indeed be a financial expert that he is reputed to be, however he lacks the tools to restructure the state economy in a short span of time. The economy has been made dependent on Delhi largess over years of neglect. There has hardly been an effort to work for building an indigenous economy, depending on resources of the state. This could be done by sustaining the traditional economic avenues, plus exploring new ones. In absence of such an effort, no amount of hyping figures or gloss in presentation can hide the fact that JK is a debt ridden state, lacking food as well as energy security—essentials for economic well-being.
Hyping budgetary figures has taken a new route in representation of budgets ever since Haseeb Drabu assumed the charge of finance portfolio, accounting centrally sponsored schemes with the figures that state is supposed to work with. The inflated budgetary estimate totalling 80313 crores on a closer scrutiny shows wide gaps. These gaps could hardly be filled to work out the budget in practice, as per the figures exhibited in budget estimates. The central schemes make out a total of 15723 crores including 8300 crores in Prime Ministers’ development programme and 7423 crores in central schemes. The central schemes run on the regulations of their own and are subject to central scrutiny. Prime Ministers’ development programme is similarly monitored by GOI’s ministry of home affairs. There is hardly any reason to see them as flagship projects based on state resources. If we leave these schemes outside the purview of state budget, as it ought to be, being the practice of yester-years, we are left with a figure of 64,590 crores, instead of 80313 crores. There is added carriage, as much as 20 percent of the total budget estimate of 80313 has been left to burrowing. It works out to be 16062 crores. Deducting the amount slated for central schemes (15723 crores) plus the 20 percent (16062 crores) meant to be burrowed; the state is left with, what in net terms works out to be 48528 crores. Money meant to be burrowed cannot be taken to be money in hand.
The revenue receipts have several heads-central grants, state’s share of central taxes, state’s own taxes, state’s non taxes. The deficit in overall estimates is made up by burrowing, as already noted; it has been put as 20 percent. This is as far as the money comes. On how the money goes, 30 percent of 80313 crores total budget estimate has been shown as salaries (pay of establishment) and six percent to be paid as pensions. This works out to be 23863 crores to be paid as salaries and 5100 crores to be paid as pension, a total of 28963 crores. As already made out deducting the money meant for central schemes (15723 crores) plus the money meant to be burrowed (16062 crores) the state is left with a working budget of 48528 crores in real terms. Out of this amount, 28963 crores are slated to be paid in salaries and pensions. In percentage terms it works out to be 59.68 percent of 48528 crores instead of what is has been put as 36 percent (30 percent in salaries and 6 percent in pensions of 80313 crores). This shows that a much higher percentage is paid as salaries and pensions than shown in budgetary figures.
The revex (revenue expenditure) is largely consumed by salaries and pensions. The state is committed to pay for power purchases to the tune of 7400 crores. Another major item shown in revex comes under the heading of ‘other expenditure’ which in effect means administrative expenditure needed to run the state. It has been shown as 13 percent of 80313 crores, which works out to be 10440.69 crores. Adding power purchases, administrative expenditure to salaries and pensions component hikes the revex to 46763.69 crores, in a situation where the state has a working budget of 48528 crores. Given the amount shown as revex (salaries, pensions, power purchases, and other expenditure) it could be imagined what is left for capex (capital expenditure). It has been showed to be 36 percent of 80313 crores, whereas the hyped-up amount includes the central schemes, Prime ministers’ development programme, and 20 percent burrowing. The capex, as is known is meant to build assets that sustain the state by adding to the resource base. The state has hardly any avenues left to build assets based on state’s own resources, besides what is slated as central schemes plus Prime Ministers’ development. The capital expenditure (capex) whatever it would work out to be ultimately out to be has to be largely based on borrowings.
The state is thus slated to borrow money in a situation where JK State’s liabilities have hiked to 62,207 crores and in the budgetary allocation of 2018-19, it stands noted that in debt servicing the state has to pay 2727 crores on repayment of debts and 4725 crores as interests. Jugglery of figures cannot hide stark facts
Yaar Zinda, Sohbat Baqi [Reunion is subordinate to survival]