Uproar in Assembly over Centre’s interest-free loan scheme for UT

The Jammu and Kashmir Legislative Assembly on Monday witnessed chaotic scenes during a discussion on the Special Assistance to States for Capital Investment (SASCI) scheme after PDP MLA Waheed Para alleged that the initiative could push the Union Territory into a “debt trap”.

The issue arose during the debate on the Budget presented by Chief Minister Omar Abdullah on February 6. National Conference (NC) legislators objected to Para’s remarks, leading to heated exchanges in the House.

Jammu and Kashmir was brought under the ambit of the Special Assistance to States for Capital Investment (SASCI) scheme this financial year. The Central Government’s scheme provides states and Union Territories with 50-year interest-free loans for undertaking capital investment and infrastructure projects. It has emerged as a significant fiscal instrument, emphasising substantive reforms across key sectors by offering financial incentives linked to such reforms. The loans provided under the scheme are over and above the normal borrowing ceiling permitted to states.

Para said, “The chief minister and NC MLAs are boasting about bringing SASCI to the UT. This is not a welfare scheme but a debt trap through which you are mortgaging J&K to industrialists.”

“You are taking loans from the market, which amounts to destruction and sets a very dangerous precedent,” he added.

Referring to last year’s Budget of Rs 1.40 lakh crore, Para said nearly Rs 40,000 crore had been earmarked for revenue expenditure, while capital expenditure stood at around Rs 7,600 crore. “With barely 30 days left for the financial year to end, I want to know whether the government is capable of spending nearly Rs 1 lakh crore within this short period,” he said.

The exchange led to sharp arguments between Para and NC legislators, forcing repeated interventions from the Chair. The proceedings were eventually adjourned amid the uproar.

BJP MLAs also staged a walkout during the commotion, alleging that they were not given adequate time to speak on the Budget. Some members attempted to enter the well of the House but were restrained by marshals.

Mubarak Gul, who was in the Chair, made repeated attempts to restore order before adjourning the House about half an hour ahead of the scheduled end of the first sitting.

Para further said that the NC had received a mandate to safeguard the interests of Jammu and Kashmir following the abrogation of Article 370 in 2019. “It is unfortunate that instead of honouring that mandate, you are putting the entire J&K on sale today,” he alleged, urging the government to reconsider the scheme and cautioning against pushing the UT towards economic distress similar to countries such as Sri Lanka and Pakistan.

PDP president Mehbooba Mufti, in a post on X, said: “Waheed Para today exposed a deeply dangerous move by the J&K government taking money under SASCI in the name of ‘aid’ when in reality it is a 50-year market loan. If the state fails to repay, our public infrastructure will be mortgaged and handed over to private control. This is nothing short of putting J&K’s future on sale.”

She added that the issue required urgent debate in the Assembly and warned that “if this reckless path continues, whatever little survived after August 5, 2019 disaster, will be auctioned off and the NC government will be solely responsible for this historic betrayal”.