Financial Crisis Deepens In JK

Financial Crisis Deepens In JK

30 March 2014
Rising Kashmir
Asem Mohiuddin

Srinagar: The Commercial Taxes Department is closing the financial year short of over Rs 400 crores in tax collection aggravating J&K's fiscal challenges. The present shortfall in revenue realization is likely to hit new target of Rs 7500 crores during the financial year 2014-15. Well placed sources told Rising Kashmir that against the target of Rs 6400 crores including Rs 4800 crores in Commercial Taxes and Rs 1700 crores in excise department, the department has slipped by Rs 400 crores to achieve the target. 'The present slip of Rs 400 crores is not so big but the next target of Rs 7500 for the financial year 2014-15 crore is totally impossible to achieve given the present situation,' revealed the official sources. The shortfall amidst ongoing fiscal crisis in state has come a as a significant setback to the state government to manage the financial affairs in state. Presently the state has over Rs 4000 crore fiscal deficit in addition of plan cut of Rs 700 crores by Planning Commission of India. The local taxes generation in the state has significantly helped government in addressing the financial demands of J&K and with the growing requirements in all sectors. Official sources termed the recent shortfall as unfortunate. 'In coming year we expect Planning Commission of India may further reduce size of our annual plan due to certain issues. Most of our requirements are to be addressed from local resources and any shortfall in any sector would have visible impact on state economy,' sources said. To control the growing fiscal deficit, the state government since 2010-11 levied many taxes in the state and brought it down to 4.15 per cent from 8.24. However, since last two years the deficit has further increased and constantly remains at 5.24 percent. Even no policy has been designated by the government to control the financial losses due to impending elections in the state. The highest contributing sector to fiscal deficit in the state is power with Rs 2281 crores, which was meager Rs 275 crores in 2002-03. As the government has an implication of Rs 1680 crores as third and fourth installment of 6th Pay Commission and pensions during 2013-14-15, it is unlikely to achieve the future targets under Fiscal Responsibility and Budget Management (FRBM) set up by Planning Commission of India (PCI).