July 1998 News

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Centre Announces Measures to Help Jammu and Kashmir's Financial Problems

5th July 1998
The Hindu

NEW DELHI, The Centre today announced a number of measures to help Jammu and Kashmir tide over its financial difficulties. These include an "on- account" release of Rs. 250 crores pending further discussion between the Planning Commission and the Finance Ministry; additional funds for the Dal Lake Conservation Plan; and advance payment of security-related expenditure.

The decision was taken at a high-level meeting attended by the Union Home Minister Mr. L. K. Advani, the State Chief Minister Dr. Farooq Abdullah, the Finance Minister, Mr. Yashwant Sinha, the Deputy Chairman of the Planning Commission, Mr. Jaswant Singh, the Defence Minister, Mr. George Fernandes, and the Power Minister, Mr. P. R. Kumaramangalam.

It was agreed that the State Government would also take steps to improve its own resources. The advance on security-related expenditure would be on pro rata monthly instalment which would be adjusted against the State Government's claims. PTI reports:

Mr. Fernandes told presspersons after the meeting that the Centre had to meet security-related expenditures (SRE) and the States could not be left to bear the burden on their own.

Mr. Yashwant Sinha said the meeting was in continuation of the earlier meetings held here and in Srinagar last month to discuss ways and means to give impetus to development activities in the State. He said the meeting felt that a package was necessary to combat the situation facing the State.

The State Government has been incurring substantial expenditure on account of the adverse security situation. According to State Government sources, as against the SRE of Rs. 1,684.06 crores incurred by the State from 1989-90 to the end of March this year, Centre had reimbursed only Rs. 887.30 crores.

The balance amount of Rs. 796.76 crores had not been reimbursed so far, they said.

The State Government had sought financial assistance in the form of grant or soft loan to phase out the overdraft with a commitment to cover the current deficit by additional Central assistance in order to protect the State's annual plan.

The deficit accumulated at the end of March 1998, had shot up to an alarming level of Rs. 1,143 crores and was expected to be of the order of Rs. 1,544 crores by the end of the current financial year, the sources said.


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