A crisis-anemic state
Scary news reports of JK economy in doldrums make headlines, the fact however stays that anemic state of JK finances is not an overnight tale, it is decades old. Extent of economic sickness though may vary. Not because of market forces, as is the case in settled economies, but on diktats. JK continues to stay on political as well as economic diktat. The economy is monitored ever since control was surrendered in 1952 Delhi agreement. Since it is managed, crisis is relative rather than real, fed rather than factual. JK pre-1947 had 3:1 positive trade balance implying an export of 3 times In excess of import. Accepted, poverty was stark, however there were no loans and liabilities, nor a negative trade balance of 7:1. The question arises—does unbounded consumerism shorn of production amount to richness? A look at the budget outlay of last three years relates a tale that needs to be related in order to comprehend, what makes economy, as anemic as it is.
In 2012-13 break-up could be related as follows [resources from center: Rs. 14354 crores (42.40%) share in central tax pool: Rs. 3870 crores (11.44%) state’s own tax revenue: Rs. 5833 crores (15.20%) non tax revenue: Rs. 2160 crores (6.43%) adds to: Rs. 26217 crores (75. 47%) of budget outlay]. In 2013-14 the estimates amounted to [resources from center: Rs. 16493 crores (43.32 %) share in central tax pool: Rs. 4514 crores (11.85%) state’s own tax revenue: Rs. 6820 crores (17.91%) non tax revenue: Rs. 3400 crores (8.93%) adds to: Rs. 31,227 crores (82.01 %) of budget outlay]. In 2014-15 it may be put as [resources from center: Rs. 22,973 crores (52.75%) share in central tax pool: Rs. 5191 crores (11.95 %) state’s own tax revenue: Rs. 7496 crores (17.25 %) non tax revenue: Rs. 3561 crores (8. 19%) adds to: Rs. 39,221 crores (90.14%) of budget outlay].
Capital Receipts amount to [Rs.5560 crores in 2012-13, Rs. 4098 crores in budget estimates (BE) of 2013-14 and in re-appropriated estimates (RE) Rs.5062 crores, and it was slated to be Rs. 4322 crores in 2014-15]. These receipts added to figures already laid down make up the total receipts [2012-13: 26217 crores + Rs. 5560 crores (Rs. 31,777 crores) 2013-14: Rs. 31227 crores + 5062 crores (Rs. 36, 289 crores) and in 2014-15: Rs. 39, 221 crores + Rs. 4322 crores (Rs. 43543 crores]. In the preceding budgets: 2012-13 and in 2013-14, there has been a scaling down from Rs. 33853 crores to Rs. 31777 crores and from Rs. 39068 crores to 36298 crores in subsequent years. This is because of non-release of central grants. At the fag-end of fiscal 2014-15, JK remains starved of funds due to federal non-release, an emphatic proof, if one is needed that shorn of federal release, state would have an economy in doldrums.
Capital Expenditure (CAPEX) corresponds to the State’s own investment outlay on the acquisition of permanent assets like land, buildings, power projects, Irrigation and water supply schemes, establishment of Industrial Estates, all extensions and structural alteration of existing assets, construction of roads, railways, airports, plant/machinery, Inter-State Bus Terminals etc. Disbursements, which comprised of repayment of State public debt and loans and advances made by the State to the various entities, are also taken as Capital Expenditure. In this category gets appropriated [Rs. 6660 crores in 2012-13, budget estimate (BE) for 2013-14 was Rs. 9378 crores and re-appropriated at Rs. 8672 crores, projected to be Rs. 10595 crores in 2014-15]. CAPEX for the financial year 2014-15 was restricted to a projected hike by 22 %, where in the preceding fiscal it was 31 %.
We may assess the sectors the state may stress upon to evolve permanent assets for further growth, as entailed in capital expenditure (CAPEX). And shy away from ventures, which continue to be a drain on exchequer without a productive potential, what the revenue expenditure [REVEX] entails. REVEX covers all the routine administrative expenditure of the State, incurred salaries and wages, maintenance and repairs overheads like payment of rent, taxes, user charges of services, insurance premia and interest. It also includes expenditure on goods for sale like that in Stationery Depots, Govt. Presses, Agriculture Production Department, Health institutions etc. Revenue Expenditure is estimated at [Rs. 25117 crores in 2012-13, Rs. 28690 crore is the budget estimate (BE) in 2013-14 and re-appropriated Rs. 27617 crores, projected to be Rs. 32948 crores in 2014-15]. In 2014-15 REVEX was projected to show a hike of around 19 percent, while as the hike was modest—around 10% in the preceding fiscals. In a further estimate non plan REVEX was projected to increase by 14 percent in the budget year as opposed to 10 percent increase clocked in the preceding fiscal. This is a natural corollary of hike in salaries, pensions and interest payments. While as salaries were calculated to grow at the rate of 20 percent, the estimates of pensions and interest payments were estimated to grow at 8 and 5 percent respectively.
That CAPEX is not growing upon desired lines, while as undesirable REVEX is showing hikes, which hinder development of assets that could fuel receipts in years to come. And these unhealthy trends should concern cross section of civil society.
Yaar Zinda, Sohbat Baqi [Reunion is subordinate to survival]