JK Groans In Debt Trap

JK Groans In Debt Trap

3 March 2012
Greater Kashmir
Firdous Tak

Jammu: Indicating that Jammu and Kashmir was slipping into a debt trap, the Economic Survey report, released by the state government this week, has pointed out a whopping increase of Rs 2548 crore in the state liabilities, which crossed Rs 31000 crore during the financial year 2010-2011. As per the figures revealed in the report, the state was having an outstanding debt of Rs 31272 crore at the end of fiscal year 2010-11. The liabilities include internal debt of Rs 17835 crore, loans and advances from central government amounting to Rs 2032 crore and Rs 11405 crore of other liabilities accounted for under Public Account. The figures, the report says, does not include Rs 11 crore investments made in Calamity Relief Fund. “Liabilities of the state government thus increased by Rs 2548 crore from Rs 28724 crore in 2009-10 to Rs 31272 crore during 2010-11”, the report reads, adding, “The public debt comprising internal debt of the state government and loans and advances from the central government increased by Rs 1274 crore from Rs 18593 crore in 2009-10 to Rs 19867 crore at the end of 2010-11.” The state also acts as a banker and trustee in respect of deposits like small savings collections, provident funds and deposits. “There was an increase of Rs 1263 crore in respect of such liabilities of the state government during this period. However, the state has been in a position to liquidate the huge burden of over draft from the Jammu and Kashmir Bank but for that reason the government has again resorted to market borrowing.” “The financial year of 2010-11 started with a maximum limit of an overdraft of Rs 2965 crore from Jammu and Kashmir Bank, with additions of Rs 1847 crore and discharge of Rs 4812 crore during the year, thereby liquidating the liability of OD with the Bank, that had assumed the character of structural liability over the years.” The report, however, pointed out that for liquidating the overdraft of JK Bank an Additional Open Market Borrowing (AOMB) of Rs 1300 crore (as a special provision this amount has not to be taken into account when calculating the state’s Consistent Fiscal Deficit). Beside this, Rs 1000 crore grant was also received from the Ministry of Finance as per recommendations of Thirteen Finance Commission. During the year the government also paid Rs 227.21 crore as interest on the Over Draft.