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• With revenue collection showing just a marginal increase, revenue expenditure in Jammu and Kashmir has grown by 27 percent - mainly on account of power purchase, disbursement of salaries, pension and interest payment.Official figures say that after the proposal of state government to get Rs 4285 crore to pay the arrears of employees on account of 6th Pay Commission was rejected by the Central government, the revenue expenditure on meeting the demands of the employees is main reason for the Fiscal Deficit (FD).

• “In Jammu and Kashmir due to comparatively high employees’ base, salary/pension increase on account of pay commission is about 4 per cent of GSDP (at current prices) for 2010-11,” says the Economic Survey 2011-2012.As per the 13th Finance Commission, the Fiscal Deficit position is not encouraging. “The deficit is at 7.6 per cent in 2007-08 that included Rs 606 crore interest payment on NSSF loans of past years due in previous years and as such the Fiscal Deficit for 2007-08 has been overstated by that amount,” survey says.

• Figures reveal that though the Fiscal Deficit had slightly recovered, Rs 2666 crore in 2007-08 (8.4 per cent of GSDP) to Rs 2748 crore in 2008-09 (7.9 per cent of GSDP), but at Rs 3989 crore, it has again slipped to 10.4 per cent of GSDP in 2009-10.Though Government on its part has said that it has taken various measures to address the issue of growing Fiscal Deficit, but these measures have failed to have any suitable impact. “Already fresh recruitment has been put on stipendiary mode, but this measure has however encountered road block on account of court stay on its implementation by the Government”, the survey says.

• For additional resource mobilization, government claims that Jammu and Kashmir Water Resources Regulation and Management Act passed in 2010 could be one of the alternative to address the FD issue. “This single measure has the potential of generating gross revenue of order of Rs 800 crore to Rs 900 crore annually”, says the report.On the other had, report has expressed dismay over the functioning of Public Sector Enterprise which are constantly in red for the past two decades. “State Government has been providing some budgetary support to supplement the revenue of these corporations for payment of wages but still there are pending arrears of wages as well as statutory liabilities and government has introduced VRS/GHS scheme to address the issue”, says the report.

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