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No official lunches in debt-ridden 'paradise on earth', it's austerity time

Mukhtar Ahmad in Srinagar

Jammu and Kashmir, once described by Jawaharlal Nehru as paradise on earth, is caught in a debt trap. The cash-starved state government seems helpless and has cracked the whip on itself by announcing austerity measures to cut down expenditure.

Chances are that it might never be able to come out of this trap unless the Centre decides to bail it out through a massive injection of funds.

While the state government has been unable to increase revenue because of colossal arrears in sales tax, electricity bills and other revenue, mounting interests on the overdraft taken from the local Jammu and Kashmir Bank plus a budgetary deficit of Rs 12.8 billion is being described as 'unmanageable' by experts.

The overdraft from Jammu and Kashmir Bank today stands at Rs 9.78 billion. Although Chief Minister Dr Farooq Abdullah announced that the ''Centre has agreed to support our plan'', there is little on the ground that suggests that the fund flow from the Centre has begun.

A large number of government employees shall go without salaries for the fourth month in a row. What makes matters worse for the state government is the fact that 40,000 new recruitments have been effected since Dr Abdullah's ascension two years back.

Reports of large-scale bunglings in these recruitments have deprived the government of popular support while additional financial burden arising out of such recruitments is breaking the back of an already crippled financial edifice.

Realising the serious implications of the crisis, the best the state government could do was to announce austerity measures. After a high-level meeting in Srinagar on Tuesday, the government announced drastic austerity measures. To wit, cuts in departmental expenditure with immediate effect.

These measures, a government spokesperson said, would apply to public sector undertakings and autonomous bodies.

A ten per cent across-the-board cut has been imposed on budget provision under the head maintenance and repairs, purchase of material and supplies, machinery and equipment.

There will be no more official dinners and lunches except those hosted by the chief minister and ministers. The government warned of strict administrative action against erring employees.

A state finance department official says that over 648 bills in various departments remain unpaid. In spite of the recommendations of the Godbole Committee, set up by the state government, to raise the state revenues by over Rs 4 billion, only Rs 1.2 billion had been collected till the end of September.

''We are nearing a stage where we won't be able to pay salaries even to the Secretariat employees,'' says an official. The latter are the among the lucky few who are paid salaries promptly, in spite of the prevailing crisis.