Fiscal deficit estimated at Rs 9,354 cr in 2017-18: Report

JAMMU: Jammu and Kashmir will continue to exceed the limits set by the Fiscal Responsibility and Budget Management (FRBM) Act-2006 to reduce fiscal deficit and outstanding liabilities, which could have far-reaching negative impact on the economy of the state during the next few years.

Sumit Hakhoo

Tribune News Service

Jammu, January 12

Jammu and Kashmir will continue to exceed the limits set by the Fiscal Responsibility and Budget Management (FRBM) Act-2006 to reduce fiscal deficit and outstanding liabilities, which could have far-reaching negative impact on the economy of the state during the next few years.

In 2017-18, fiscal deficit is estimated at Rs 9,354 crore, 6.2 per cent of the Gross Domestic Product (GDP) exceeding the FRBM limit of 3 per cent set by the Finance Ministry for all states.

Fiscal deficit is the excess of total expenditure over total receipt of any government to fund various sectors of economy. This gap is filled by borrowings by the government from financial institutions, which leads to an increase in total liabilities of the government. This estimation has been done by the PRS Legislative Research (PRS), a research group.

As per the data, outstanding liabilities are expected at 47.3 per cent of the state GDP. Outstanding liabilities mean accumulation of borrowing over the years. The PRS is an independent research group and track the functioning of Parliament and state Legislatures by releasing detailed data and analysis.

Experts say that the state has to take measures to curb the deficit in the next few years to ensure good financial health and increase the growth rate.

In its Macro Economic Framework statement in the Legislative Assembly, the government has blamed that high expenditure on salaries, pensions, interest payment, purchase of energy and other non-developmental works are hampering fiscal targets set in consonance with the FRBM Act.

The Gross State Domestic Product for 2017-18 at constant prices is estimated to be at Rs 1,06,530 crore. This is 7.8 per cent higher than the estimate for the current fiscal.

Jammu and Kashmir has estimated to generate Rs 5,308 crore through non-tax sources in 2017-18. The state is expected to generate Rs 4,800 crore from the supply of power.