JK CM discusses fund flow with Union Finance Minister

New Delhi/ Jammu, February 1 (Scoop News) –Chief Minister, Omar Abdullah Friday had a meeting with Union Finance Minister, P. Chidambaram and discussed matters relating to resource position, Annual Plan, PMRP, Special Plan Assistance (SPA), extension of industrial package to Jammu and Kashmir, Security Related Expenditure (SRE), open market borrowing, flow of central assistance and expressed other related issues.

            Omar Abdullah gratitude to the Centre Government for liberal financial assistance to the State in its endeavour to carry forward development strategy and meet expenditure needs on various counts.

            In the meeting, the J&K Chief Minister discussed matters relating to the resource position against the approved plan outlay of Rs. 7300 crore and receipts from the Government of India against various components of the approved scheme of financing, as also the Prime Minister’s Reconstruction Programme (PMRP) of Rs. 700 crore for 2012-13 in detail.

            As on date, over Rs. 6301 crores under various components of plan financing have to flow from the Centre to the State which include the balance of Rs. 1719 crore under Special Plan Assistance (SPA) against the approved amount of Rs. 1984 crore.

            The Chief Minister emphasized the need for early release of the balanced amount to meet the financial requirements of the State on various counts. He also urged for early release of funds under PMRP so that the progress on various projects under implementation under PMRP is not hampered.

            Omar Abdullah also raised the issue of pending reimbursement of over Rs. 253 crore under Security Related Expenditure (SRE) and said that the pending of funds affect the resource position of the State. He underlined the need for early clearance of all pending claims in this regard.

            The Chief Minister emphasized on exemption of additional market borrowing, included as a component for plan financing, from calculating the State’s FRL-Constant fiscal deficit targets as recommended by the 13th Finance Commission for AOMB.

            Discussing flow of central assistance, the Chief Minister said that in case of J&K State, with limited working season, to ensure full and judicious plan implementation, there should be upfront release of Central assistance/grants to avoid mismatch in the requirement and flow of funds which usually tend to flow at the close of the financial year, when the working season in most parts of the State is over.

            “It would be much more meaningful if the tied funds and centrally sponsored schemes are sanctioned / released in the beginning of the year. Alternately, at least 50 percent funds should be released in April and balance after the stipulated percentage of available funds has been utilized by the State”, he said and asserted that States like Jammu and Kashmir where the working season is very brief, the releases should be made upfront or a system of proportionate allocation be made so that there is no liquidity mismatch in the State.

            Batting for extension of special package for industrial growth in Jammu and Kashmir, the Chief Minister said that the incentive package for industrial growth has lapsed on 14th June 2012. He said the State Government through the Consultant deputed by Industrial Policy and Promotion (DIPP), Government of India and also as directly raised this matter with the Ministry for Commerce and Industry for extension of package for another 10 years including the clause of “location neutrality” so that the industrial unit situated outside Industrial Estates are also benefitted. The Chief Minister sought early approval of this extension from the Ministry of Finance and the Planning Commission of India.

            Omar Abdullah also discussed matters pertaining to early clearance of Pakaldul HE Project by the Centre Committees so that the Joint Venture would go for the financial closure and subsequent allotment of the project.

            The Finance Minister assured his full support to the Chief Minister in his efforts of resource mobilization and said that the matters raised would be sorted out on priority.

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