Weekly Current Affairs

J&K gets 10% of Central funds with only 1% of population [Polity]

  • Jammu and Kashmir has received 10 per cent of all Central grants given to states over the 2000-2016 period, despite having only one per cent of the country’s population.
  • In contrast, Uttar Pradesh makes up about 13 per cent of the country’s population but received only 8.2 per cent of Central grants in 2000-16. That means J&K, with a population of 12.55 million according to the 2011 Census, received Rs.91,300 per person over the last sixteen years while Uttar Pradesh only received Rs.4,300 per person over the same period.
  • Even among the special category states, Jammu and Kashmir receives a disproportionate amount of Central assistance.
  • n general, the special category states get a higher share of central grants, and Jammu and Kashmir being one of them will also get such treatment. But even among them, Jammu and Kashmir is getting a higher share due to its disturbed status and its border with Pakistan.
  • This seeming imbalance in Jammu and Kashmir’s fi na nces — with Central grants accounting for 54 per cent of the state’s total revenue and 44 per cent of its expenditure in FY16 — assumes signifi cance in light of the fact that the Comptroller and Auditor General of India in 2015 castigated the Jammu and Kashmir government for the pendency of a large number of inspection reports and observations highlighting “serious fi nancial irregularities” in the state.
  • This seeming imbalance in Jammu and Kashmir’s finances — with Central grants accounting for 54 per cent of the state’s total revenue and 44 per cent of its expenditure in FY16 — assumes signifi cance in light of the fact that the Comptroller and Auditor General of India in 2015 castigated the Jammu and Kashmir government for the pendency of a large number of inspection reports and observations highlighting “serious fi nancial irregularities” in the state.
  • Fiscal reasons: Service Tax is not levied in Jammu and Kashmir and hence the state does not get a share of the same in the devolution of central taxes to states.
  • Another reason lies in the Centre’s treatment of the north-eastern and hilly states.