No decision on J&K demand for rehabilitation package

NEW DELHI DEC. 25. The Central Government is yet to take a decision on the J&K Government's demand for a hefty financial package of Rs. 2,100 crores for the rehabilitation of the Kashmiri migrants who might return to the valley with the installation of the Mufti Mohammad Sayeed Government. To begin the process of rehabilitation, the State has asked for an initial assistance of Rs.100 crores.

The Planning Commission, which normally considers such special demands from the States, has, however, declined to take a stand on the issue. Instead, it has said that any action on the special package would have to be taken by the Department of J&K Affairs in the Union Home Ministry.

In fact, the J&K administration has placed a big list of demands before the Central Government as part of its package to restart the process of development in the State. And in most cases, the Centre finds itself unable to accede to the requests.

For instance, the State Government has sought a special consideration for its market borrowing programme to finance part of this year's Annual Plan of Rs. 2,200 crores. Of this total outlay, the State is to raise loans worth nearly Rs. 542 crores. It has asked the Centre to raise the entire loan on its behalf from financial institutions and also repay 90 per cent of the loan with interest. The State has offered to repay the balance on its own.

The 90:10 ratio has been proposed by the State in keeping with the pattern of normal Central assistance to Special Category States (J&K enjoys this status) where the assistance is in the form of 90 per cent grant and 10 per cent loan. However, the Planning Commission's position is that accepting the State's proposal to place negotiated loans on par with normal Central assistance would be difficult as this could set a precedent for other States.

To overcome the acute power crisis in the State, the J&K administration had sought an immediate assistance of Rs. 211 crores, but the Planning Commission took the stand that such resources should be generated out of the revenue earnings of the State Electricity Board. Similarly, the State's request for counter-guarantees for Bagliar and Sawalkot power projects had been turned down on the ground that the Central Government had stopped giving such guarantees for any power project.

Sources, however, emphasise that the Centre's stand on many of the State's requests are guided by pure financial considerations and have nothing to do with the parties in power in Jammu and Kashmir. In fact, many of the demands were mooted by the previous Farooq Abdullah regime and his party was and continues to be a partner in the ruling National Democratic Alliance (NDA), the they added.

On the contrary, the State has not been able to generate resources on its own for development and there were shortfalls in the Ninth Five Year Plan targets despite increased assistance from the Centre and enhanced borrowings. For instance, during the Ninth Plan period (1997-2002), the State was expected to generate its own resources to the tune of Rs. 312 crores but ended up with deficit of Rs. 8,857 crores.