J&K Witnessing Steady Deterioration In Finances, Liabilities Piling Up Sharply

26 March 2015
The Daily Excelsior
Mohinder Verma

Jammu: Jammu and Kashmir is continuously witnessing steady deterioration in its finances with main revenue generating departments failing to make pending recoveries from the defaulters in both the divisions of the State. The increase in liabilities has resulted into non-availability of sufficient resources for even meeting the non-developmental expenditures. No doubt, debt is a source for funding capital works, which as a matter of fact, should not be a burden as revenue is expected in return besides creation of the capital assets. But Jammu and Kashmir has completely fallen in the debt trap mainly because of continuous increase in liabilities during the past several years owing to failure of main revenue generating departments to make recoveries, official sources told EXCELSIOR. 'The increase in liabilities has resulted into non-availability of sufficient resources for even meeting the non-developmental expenditures such as salaries, pensions, interest payments and purchase of energy', they said while disclosing that additions in pending recoveries are mainly due to non-payment of dues by the consumers and tax arrears in time and dispute of claims in certain cases. 'There has been steady deterioration of the State finances since 1990 on account of a range of reasons including rising salary and pension expenditure, growing power deficit, rising interest liabilities, loan repayments and inadequate funding of the Plan', they said, adding 'shortfall in non-tax revenues too has contributed to the increasing financial difficulties'. The situation vis-à-vis debt liabilities can be gauged from the official figures, which indicate that liabilities of J&K were to the tune of Rs 10442.98 crore in 2001-02 and the same increased to Rs 24797.88 crore in 2008-09, Rs 42283.57 crore in 2012-13 and Rs 47316.5 crore in 2013-14. Stating that recent devastating floods have also compounded the problem, sources said, 'unprecedented floods in the month of September last year resulted in colossal loss to public and private infrastructure, which inter-alia resulted in the shortfall in estimated tax-non-tax revenues of the State coupled with shortfall in the Central flow of funds and delay in finalization of Plan'. Giving details of arrears recoverable by the Commercial Taxes Department, sources said that arrears to the tune of Rs 1235.16 crore were yet to be recovered by the department up to ending January 2015 on GST, VAT, MST heads of account. Of this amount, Rs 674.38 crore was pending in Jammu division and Rs 560.78 crore in Kashmir division. Similarly, arrears to the tune of Rs 47.91 crore were pending for recovery up to ending January 2015 by the Excise Department on account of excise duty, toll tax and entertainment duty. Of this amount, Rs 41.08 crore was pending in Jammu division and Rs 6.83 crore in Kashmir division. It is pertinent to mention here that arrears of Commercial Taxes Department are still at the alarming level despite intervention from the State High Court, which in numerous orders issued explicit directions for prompt recovery of arrears from the defaulters. The High Court even issued directions for taking stringent measures to make the recoveries. 'The performance of Power Development Department, which is another major revenue generating agency of the Government, is also under big question mark as revenue arrears are on continuous rise during the past many years', sources said. In Jammu region, the revenue arrears in PDD up to ending December 2014 were to the tune of Rs 673 crore while as the same in Kashmir province were Rs 491 crore. In Jammu region, the arrears were to the tune of Rs 131 crore in 2001 and the same increased to Rs 673 crore in 2014. Simila