The central government has financed 60 per cent of total expenditure of the Jammu and Kashmir government through non-debt resources during 2015-16, a jump of 3 per cent from 2013-14.
The central government has financed 60 per cent of total expenditure of the Jammu and Kashmir government through non-debt resources during 2015-16, a jump of 3 per cent from 2013-14, the Comptroller and Auditor General (CAG) has said. “The non-debt resources transferred by the central government… financed 60 per cent of the total expenditure of the state government during 2015-16,” stated the CAG report for the year to March 2016. The CAG also highlighted the state’s increasing dependence on transfer of resources from the Centre. The financing pattern shows an increase of 3 per cent to 60 per cent each in 2015-16 and 2014-15, from 57 per cent in 2013-14. However, it stood at 63 per cent during 2011-12, showing a decline in the state’s dependence on transfer of central resources.
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The state could not maintain its revenue surplus that fell from Rs 2,103 crore in 2011-12 to a deficit of Rs 640 crore in 2015-16 due to a shortfall in its own non-tax revenue and grant-in-aid vis-a-vis projected receipts, the CAG said. The state’s own tax revenue has seen a growth of 15.66 per cent over the previous year. The CAG further said the budget has estimated revenue surplus of Rs 3,707 crore during the current year whereas fiscal and primary deficits showed a declining trend vis-a-vis the budgeted estimates. Capital expenditure read only 59 per cent of the budgeted estimates of Rs 12,685 crore, which indicates that asset creation was not given adequate priority, the CAG said.
The state government has also drawn flak from the CAG for the decline in its share in Union taxes and duties and grants from the Centre at the end of last financial year. “The state’s share in Union taxes and duties and grants together constituted 72.77 per cent of the total revenue receipts during 2011-12, but declined to 68.59 per cent during 2015-16, which seriously impaired the liquidity position and resulted in reduction in revenue surplus with consequent increase in fiscal deficit,” the CAG said in its latest report released recently. “Financing the redemption of public debt and other liabilities implies that the liabilities are not repaid out of current revenues, but merely rolled over indefinitely,” it noted.
The state’s tax revenue mobilisation fell short of the budgeted (revised) target by Rs 662 crore, it said, adding that there was a shortfall in resources. “Actual fiscal deficit (Rs 8,060 crore) was 8.77 per cent of Gross State Domestic Product (GSDP), which breached the target of 3 per cent of GSDP set under the Fiscal Responsibility and Budget Management (FRBM) Act,” the report added.