State’s revenue crunch, delay in Delhi’s assistance main hurdle
Shabir Dar/Rashid Paul
Srinagar, Feb 17: With the government and its employees on cross-roads over the implementation of 6th Pay Commission recommendations, the economic experts maintain that the ‘revenue crunch’ faced by the State and delay in financial assistance from New Delhi is preventing the government from increasing the wages of its work force.
Noted economist, Prof Nisar Ali told Rising Kashmir that the lack of revenue resources in the state and unwillingness of people to pay taxes is proving cumbersome for the government to implement the Pay Commission recommendations.
“The state has total revenue resources of Rs 3200 crores and our annual budget is Rs 18000 crores. The spending are approximately Rs 9000 crores and in such a situation, the state government is handicapped and the implementation of Pay commission recommendations is not possible without finance assistance from central government,” he said.
Prof Nisar said, “Nearly 55 to 60 percent of the plan goes in the payment of salaries of employees. There is no other way but to fight for the grants from the central government. The central assistance will help reduce the recession of the India’s industrial sector and the money will be used to purchase items made by Indian companies”.
He said the government should force the central government to increase the size of the state budget currently at Rs 18443 crores. The state leaders should confront New Delhi and convince them that the economic regression of the state is the thing endowed to J&K by the government of India.
The state has lost nearly Rs 25 thousand crores over the past 45 years due to Indus water treaty. The agreement deprives the state to generate its water resources for agriculture and power generation.
Taking a dig at government for failing to tap natural resources bestowed on the State, Prof Ali said, “If the potential resource – water– had been in state’s control, its tapping could have ended the economic doom of Jammu and Kashmir.
“While Gulf countries have oil, our state has the water resources. If it could have been utilised, the State would have been self sufficient and economic vibrant. And this time, the state government had not to wait for New Delhi’s assistance for implementing the 6th pay commission recommendations,” he said.
He, however, said, “Our water resources have been chocked because of the Indus Water Treaty between India and Pakistan”.
Another financial expert, pleading anonymity, said that government is unable to generate additional revenue through taxation from the primary sectors like power, horticulture, agriculture and other allied sector. “The Bombay city generates Rs 90,000 crore as sales tax but here people are not ready to pay taxes. Our potential tax is the power tariff but we are not getting much from it. People do not pay it willingly,” he said.
Firdous Ahmad, an economic scholar and banker said, “The government is not getting much revenue from industries (secondary sector) and tourism (tertiary sectors) because they have been exempted from most of the taxes. The government has to increase taxation from these sectors for augmenting revenue”.
“In many southern Indian states, where people pay taxes regularly on every public utility, the Pay Commission recommendations have been implemented. Here government needs to take long term measures to generate additional revenue for the economic upliftment,” Ahmad said.
He said, “Government needs to increase its tax revenue for strengthening the exchequer so that situation like increasing wages of employees could be met with ease”.
More than 4.5 lakh government employees have struck work twice earlier and went on a three-day strike from Monday. The government says it requires Rs.3,100 crore to implement the recommendations.
“With no additional tax revenue coming from the primary sectors, the government is waiting for assistance from the central government. But, there is a delay in financial assistance from New Delhi and this is delaying implementation of the Pay Commission recommendations in the State,” a senior government official said.
Prof R L Bhat, an economic expert at Jammu University also said the only alternative left for the State is to seek assistance from the central government. “The government can prolong the retirement age to 60 and utilize the post retirement benefits in the payment of revised salaries. This way the burden on the exchequer can be reduced by Rs 300 to 400 crores,” he added.
Source: http://www.risingkashmir.com
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