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CAG report reveals J&K spent 2,486 crore for “other than intended” purposes in 2018-19


The Comptroller and Auditor General of India (CAG) has revealed that Jammu and Kashmir spent Rs 2486 crore in 2018-19 for other purposes than intended even though total financial liabilities of the erstwhile State were as high as Rs 79,105 crore as of March 2019.

The State Finances Audit Report of the Comptroller and Auditor General of India for 2018-19 was presented in Parliament yesterday. The CAG report included details till March 2019. This report has been prepared according to Article 151 of the Constitution of India. Government rules state that if the President’s Rule is applied for more than one year in a region then the CAG’s report relating to the State would be presented in Parliament.

Report includes findings of audits of performance, various departments’ transaction, Statutory Corporations, Boards and Government Companies and observations on revenue receipts. It noted that 2018-19 cash balance wasn’t even equal to the earmarked reserve funds of Rs 2486 crore which signals that these reserve funds were used for other purposes and not for purposes they were sanctioned for. This resulted in overall fiscal liabilities of Jammu and Kashmir for Rs 79,105 crore on March 31, 2019.

Report further mentions that overall accumulated fiscal liabilities counted 1.54 times of the Government’s revenue receipts and 5.58 times of the Government’s Own Resources. The buoyancy ratio for these liabilities against Gross State Domestic Product (GSDP) during 2018-19 was set at 1.39. This ratio indicates that if there was one percent increase in GSDP then the fiscal liabilities grew by 1.39 times.

J&K maintained a revenue surplus of Rs 7,595 crore during fiscal year 2017-18. For 2018-19, revenue deficit of Rs 4,859 crore was calculated which was caused mainly by implementation of 7th Pay Commission recommendation for J&K Government employees. Government had to pay an increasing salary of total Rs 8,029 crore during 2018-19 which contributed largely to the revenue deficit.

Fiscal Deficit (FD) of the Union Territory increased from Rs 2,778 crore in 2017-18 to Rs 13,337 crore in 2018-19. There was a Primary Deficit of Rs 8,128 crore in 2018-19 in comparison to Primary Surplus of Rs 1,885 crore during 2017-18.

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