A Common man’s view
While debating JKUT budget 2025/26 we might have a long stick to beat Omar Abdullah with—does it help? In his dual role of being the finance minister of his own UT cabinet, CM Omar is severely constrained. Empathy may not however amount to silence. His constraints conceded, he remains answerable within the ambit of given responsibilities. Calling budget outlay ‘Omarnomics’ is a misplaced ornamental adornment.
Broadly taken, budget outlay has followed the set leads with some refurbishing—the long and short of it. The evolving debate in GK opinion/op-ed pages has had much needed filling in public space. Economic wisdom a la Haseeb Drabu may not be my cup of tea. I may not be as well versed as Shakeel Qalander on how the wheels of industry move. And/or how formal and informal sectors of economy perform. Keeping abreast with news and views remains a lifelong pursuit, providing space to join the debate structured to evolve commonality not contention. I am sticking to common man’s perspective, being one amongst many.
Dr. Haseeb Drabu’s ‘Band Aid Budget’ caption outlines that the restoration of statehood was not carried forward by FM Omar to help CM Omar fulfill the existential agenda of all political parties. The opening Drabu salvo carries a lament: Alas, that was not to be! Should it be taken to mean a failure of Omar’s dual role wherein Ram was less forthcoming to help Shyam? Notwithstanding his political belief, Dr. Drabu has worked with number of financial institutions to get to intricacies of what shapes a budget. Additionally, his stint as JK’s FM following the stewardship of JK Bank has provided him enough to view and analyze JK budget. The question however remains, whether it was the politician in Dr. Drabu posing a tangle or the economic expert?
I would love to believe, Dr. Drabu has taken a sabbatical from politics after high profile political assignments, such as working out agenda of alliance (AOA). Economic garb suits him much more than shaping a political profile. JK with loads of politicians, remains short on experts in economic field, environmental expertise, earth sciences surveys, horticulture growth, necessitating societal leaders filling the gaps in public space. We may get back to what Dr. Drabu rests his argument on viz a viz FM Omar not backing CM Omar on shaping an economic narrative to back political agenda on restoration of statehood?
Broad-outlines relate--Article 270 entitles state governments to a share in central taxes, it does not hold good for UT’s, even not for grants-in-aid. Two, Jammu and Kashmir Reorganization Act of 2019 which made JK a UT, requires that it be treated as a state for the transfer of net tax proceeds. Three, section 83, sub-section 1 of the Act provides that “the President (of India) shall make a reference to the Fifteenth Finance Commission to include Union territory of Jammu and Kashmir in its Terms of Reference and make award for the successor Union territory of Jammu and Kashmir.”
Dr. Drabu seems to imply lack of homework resulting in failure of Omar regime to bank on above mentioned openings and claim a share in the central taxes. He concedes though, it may not have yielded more money but would have equated J&K with states in financial relations with the Centre. The big political gain in the sense that “Transfer of Assistance to UT under MHA Demand” would get replaced by Share of UT in Central Taxes (Table 7). Its ramifications, claims Dr. Drabu could have been leveraged in the long battle for statehood that lies ahead.
In the light of what he holds, we may look at the breakup of JKUT budget to assess how substantial is his claim of JKUT’s non-utilization of mentioned openings. Total net budget estimates for fiscal 2025-26 are Rs 1, 12,310 crore, excluding provisions for ways and means advances and overdrafts. The expected revenue receipts--Rs 97,982 crore and capital receipts--Rs 14,328 crore, adds up to Rs 1, 12,310 crore. UT’s own revenues, both tax and non-tax, are estimated at Rs 31,905 crore, Rs 41,000 crore is expected as central assistance and Rs 13,522 crore as CSS and PMDP for JKUT. Gross receipts are estimated at Rs 1, 40,309.99 crore, including provisions for an overdraft of Rs 28,000 crore. Given Haseeb Drabu’s claim and the revenue receipts placed by FM/CM Omar, it is debatable, how substantial is the claim? On the face of it there is no mention of JKUT share in central taxes, as implied. Has Omar in his dual role missed the bus? Or, there is much more to it than meets the eye?
Industrialist, social activist Shakeel Qalander’s stewardship of federation of commerce and industry in different capacities, plus off and on role in several official committees assigned to assess economic affairs provides him a good look in intricacies of finance. He is not swayed by Dr. Drabu’s argument on reclaiming statehood by shaping an economic narrative. Instead, he takes central assistance to finance the budget a fact discussed ad nauseam. It remains irrespective of the economic head it falls under. Dr. Drabu while accepting the obvious seems to believe that narrative shaping could pay long term dividends, even though symbolic on the face of it. On either side of the debate, there are weighty arguments, meeting grounds too.
On debt servicing and administrative costs overshadowing developmental projects and economic services, both are on same page. Shakeel Qalander feels such valid concerns call for significant changes in resource generation, debt reduction and curtailing administrative expenses by streamlining cost. One can’t help sharing his feeling of Dr. Drabu as leading economic advocate advising strategies for restoring economic health to the extent possible. Shakeel Qalander’s call for balancing fiscal priorities and fostering sustainable economic growth is timely. Bipartisanship is the recipe for consensus building, rather a multi pronged strategy to take it wider and deeper in the public space.
Budget structures economy. Or, may we say it showpieces economy. Economy concerns bread and butter--roti, add to that kapda and makan to meet basic amenities of the common man. The concerns however have widened in 21st century much beyond the 20th century roti kapda makan slogan reverberating in length and breadth of subcontinent. In fact global challenges multiplied in 2nd half of preceding century following WWII. Wide scope of information technology added to the knowledge pool in astronomical proportions. Global race ensued. The race had on board not only the rich north, poor south too—diverse ends of the spectrum. Household billing amounted to much beyond roti kapda makan. Increasing energy bills on table, growing consumerism, multiplied by providing quality education to generation next including private tuitions have heightened the economic load. The fight is on for a common man to keep his back straight.
Budget outlay of 1.12 lakh crore with the debt of 1.25 lakh crore overrunning the outlay remains high on question marks, low in answers. Debt servicing calls for resource mobilization out of increasing expenditure and dwindling assets—a nightmare! Budgetary constraints squeeze markedly the allocation for social sector relief, apart from cosmetic measures--lowering the energy bills of AAY families, free ride to women in public transport. Without getting into the lexicon of economic terminology, high sounding idioms beyond the comprehension of a common man, simply put JKUT expenditure stays much beyond its income. It turns out to be a dependent economy high in consumerism, low in production. That is the crux asking for resolution through a structured debate.
