Friday, March 10, 2000,
Chandigarh, India


J A M M U   &   K A S H M I R

"Demand for fiscal help is not revolt"
Tribune News Service

JAMMU, March 9 — "The demand for additional financial assistance from the Centre is our constitutional right and not bagawat (revolt)". This is how the Finance Minister, Mr Abdul Rahim Rather, summed up his reply to the discussion on the Budget for 2000-2001 in the assembly here today.

He said under Article 275 of the Constitution of India the Centre was supposed to provide financial assistance to states that had severe financial crisis. He said the entire economy of the state had been adversely affected by a decade long proxy war in which the basic infrastructure had been destroyed. The state government had to spend several hundreds of crores of rupees on rebuilding burnt school buildings and bridges and the task had yet to be completed because of the cash crunch.

Mr Rath said the security-related expenses had caused another heavy drain on state's weak resources. He said despite commitment from the Centre a major portion of these expenses had not been reimbursed forcing the state to seek overdraft from the banks. He said by the end of the current financial year the security-related expenses would touch over Rs 1129 crore and in case the Centre further delayed reimbursement it would add to the difficulties of the state.


  The Finance Minister said the state had its genuine claim of seeking compensation on losses it had suffered on account of the Indus Water Treaty of 1960. He said under the treaty with Pakistan "we can not store water of Jehlum, Indus and Chenab, for power generation during the lean period". He said as a result of this treaty the state could generate just 1500 MWs of power against the potential of generating 15,000 MWs.

He reiterated the state government's demand for sharing electricity generated from the Sutlej, Ravi and the Beas, increase in free power quota from central power projects and adequate compensation in view of cash loss of Rs 6,000 crore per annum suffered by the state due to the Indus Water Treaty.

The minister said it was nothing less than discrimination when the Centre refused to waive Rs 1275 crore loan in favour of Jammu and Kashmir in the light of its announcement of having waived central loan to Punjab of the tune of Rs 8,000 crore. He said had the Centre agreed to give a retrospective effect to the scheme of giving 90 per cent central funds as grant and 10 per cent as loan the state would have been spared of paying Rs 600 crore as interest on the central loan annually.

Mr Rather wanted free share of power from Uri and Salal projects which had been built in Jammu and Kashmir. He said without the additional financial help from the Centre it would be difficult to run the affairs of the state as the annual wage bill of the employees had gone up to Rs 3,000 crore per year. He said since nationalised banks and big industrial houses had not shown any interest in investing in Jammu and Kashmir, employment avenues were very much restricted to government jobs.

Defending his Budget proposals he said he had imposed mild dose of taxes which had no direct bearing on common people. In fact Mr Rather’s main stress in his reply was based on a strong plea to the Centre to assist the state to come out of its current fiscal crunch. He announced in the House that on his part effective steps would be taken to increase tax revenue.

Earlier, the minister had to apologise when the Speaker took a serious note of the absence of ministers, including the Finance Minister from the House when there was discussion on the Budget.

Several members cutting across party affiliations supported the state government’s plea to the Centre to release additional funds. The Panthers Party member, Mr Harsh Dev Singh, while suggesting to the state government to observe strict austerity measures urged the Centre to release additional funds. He said the Centre should reimburse full security related expenses. He suggested to the state government to abolish the Upper House as had been done in several states and it would help Jammu and Kashmir to save several hundred crores of rupees annually.

During question hour the Opposition members staged a walkout in protest against backdoor employment in the Social Welfare Department. The members charged the government with having violated norms and rules while giving jobs in different departments ignoring merit.

Another walkout was witnessed when some members protested against huge sums of money the ministers had spent on their travel and telephone. More than Rs 4.8 crore had been spent by the ministers on TA and telephones in the past three years.

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