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| Fiscal prudence demands facing fiscal reality, ours is a dependent state | | 
By Rigzin Jora
After having made too much of a song and dance about highest ever devolution of funds under the new scheme of financing, both the Chief Minister and Finance Minister are in Delhi with a begging bowl.
It is easy to talk of fiscal autonomy, economic independence, quite another to walk that talk. All the talk about no longer going to Delhi with begging bowl has come crashing so soon . Fiscal prudence also demands facing the fiscal reality of the state : that this state of ours has become a dependent state.
During the course of budget discussion I had warned that the state may end up getting lesser money in the kitty than was made to believe .In the euphoria and excitement of presenting the budget for the first time ( after having written six budget speeches) Dr Haseeb Drabu ended up giving in to his journalistic indulgence more than simple budgetary exercise. While I ,too, may not be entirely correct, the fact could be some where in the middle.
The new scheme of financing under Finance Commission is premised on factors such as forest cover, area, population, fiscal discipline and most importantly on fiscal capacity/ income distance. This last criteria has been given 50 percentage point weightage.Hence, trip to Delhi with Mufti Sayeed.
Jammu and Kashmir along with North Eastern state belonged to the Special category states where we stood to gain from 90 : 10 grants to loan ratio as per the previous scheme of financing. Now we have been put to great disadvantage under the new scheme of financing.
Is it the fault of of the state that it has both hilly and mountainous terrain ;that it has factors of seasonality; that it has high infrastructure index; that it has locational disadvantages; that it has low resource base; that it has problem of viability of projects and economic activities because of geo- climatic constraints.
How is the statutory devolution under the new scheme of financing going to help the state. And if indeed the state stands to gain, why did Mufti Sahib had to plead so strongly with the NITI AYOG. Fact remains the NITI AYOG is itself confused hence the committee under its CE0 to examine the issue. Another important issue is about the centrally sponsored scheme. The union budget divided 66 centrally sponsored schemes under three categories.
The first 31 comprised those to be funded by the centre. The second category of 8 have been transferred to the states. These include backward region grant , scheme for police modernisation etc. The third category of 24 schemes are those that are to be jointly funded by the state and the centre - these include many social sector and welfare schemes
If the idea was to give more fiscal autonomy and fiscal flexibility why are almost all the states protesting including BJP ruled states.
Henceforth the centre will reduce its support to both the fully funded and partially funded schemes. States are expected to meet up the gap from the devolution funds.All in all your plan assistance will get reduced by 50 percent so also your flow of funds under CSS .
Added to this the state , given its fiscal health , may choose to give up many of the schemes out of one that stand transferred to the states for financing. AACHHE DIN AA GE YA.
(The author is the leader of congress legislature party and former senior minister in Jammu and Kashmir)
(Opinions expressed in write-ups/articles/Letters are the sole responsibility of the authors and they may not represent the Scoop News)
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