Drabu’s Analysis
Dr. Haseeb Drabu’s analysis of the J&K budget in his article “Band-aid Budget” offers a blend of concerns and insights. His assessment highlights crucial issues, many of which, I believe, are rooted in a legacy of long-standing challenges rather than recent missed opportunities.
J&K’s reliance on central devolutions and borrowings has long been a reality. However, these devolutions are a constitutional right, not a charitable grant. Simply rebranding “grants from the Union” as “share in taxes” neither alters the financial dependence nor advances the cause of statehood. Political aspirations require substantive policy action, not cosmetic fiscal repackaging—much like seeking leaves to cover oneself after complete denudation, a solution few would find acceptable.
While Dr. Drabu rightly points out that debt servicing and administrative costs overshadow developmental projects and economic services, these valid concerns call for significant changes in resource generation, debt reduction, and curtailing administrative expenses. As one of the leading economists, Dr. Drabu should have proposed concrete solutions to tackle these issues, such as strategies for enhancing resource generation, steps to reduce debt, and measures to streamline administrative costs. These actions are crucial for balancing fiscal priorities and fostering sustainable economic growth.
Another important issue raised in the article is J&K’s high import intensity, which stands at 35% of the GSDP. I believe this issue largely stems from the authorities’ failure to address the trade balance. The neglect of local industries, coupled with government procurement favoring external suppliers, has exacerbated the trade deficit. The policies outlined in the budget—such as the Public Procurement Policy, initiatives to boost horticulture productivity and exports, and efforts to encourage handicraft exports—should support local businesses and infrastructure, promoting greater economic self-reliance. Investment in the power sector, including both hydroelectricity and rooftop solar, requires serious and focused implementation to curtail imports.
I disagree with the argument that reducing total expenditure as a percentage of SDP contradicts the 9.5% growth projection. Growth depends not only on government spending but also on private sector participation, investments, and policy-driven actions. With effective implementation of the budget’s promised interventions, the targeted growth rate remains achievable.
Concerns over financial misclassification, including asset monetization, unclaimed deposits, and Capex accounting, are valid and should be addressed. Transparency in budgeting is crucial for credibility and fiscal discipline. However, while these errors are serious, they do not indicate systemic financial mismanagement. They require correction but should not overshadow the broader economic objectives of the budget.
Overall, it’s an interesting read. However, we must recognize that all of us, including Dr. Drabu as a son of the soil, share the responsibility of offering constructive economic input to the government—aiming at curative measures rather than mere criticism. Criticism can come later if the government fails to deliver on its promises or goes astray.
Shakeel Qalander
