Srinagar: After imposition of Governor’s Rule, the budget for 2019-20 was approved by then J&K Governor as head of the State Administrative Council. After downgrading of J&K into a UT in August 2019, all budgets of the UT were presented in the Parliament.
On February 5 this year, J&K’s interim budget for 2024-25 was also presented in the Parliament.
Budget speech
In her budget speech, Union Finance Minister Nirmala Sitharaman announced that Rs 17,000 crore special assistance has been worked out to correct complex financial issues of J&K.
“This year the Government of India decided to correct this historical aberration by providing adequate financial support to Jammu and Kashmir coupled with reforms to come out of the perpetual fiscal stress. I am happy to mention here that to correct the complex fiscal issues of Jammu and Kashmir, a special central assistance of Rs 17,000 crore has been worked out,” she said.
She said the unprecedented assistance would lead to complete improvement in fiscal position enabling the Government of Jammu and Kashmir to correct the legacy of financial challenges and work towards fulfilling the developmental needs and aspirations of the people, while maintaining stable fiscal health.
“As a result of this Rs 17,000 crore central assistance, the fiscal deficit to GDP ratio will be 3.0% in 2024-25 well within the target,” she said.
She announced that apart from this, a lump sum special grant of Rs 5,000 crore as additional central assistance is being provided in the current financial year.
She added that that due to historical challenges in financial management, J&K has a legacy of very high fiscal stress.
“Mr. Speaker Sir, while analysing the fiscal situation of Jammu and Kashmir, we observed that due to historical challenges in financial management, it has a legacy of very high fiscal stress. This is aggravated by the committed nature of the major expenditures not supported by proportionate increase in its revenues. Its dependence on central grant is to the tune of around 70% of its total expenditure. The perpetual fiscal stress leads to frequent use of ways and means advances and overdraft,” she said—(KNO)
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