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Government auditor CAG has red flagged Jammu and Kashmir government's high fiscal liabilities at Rs 44,673 crore by March 2014, saying it was 4.88 times of its tax and non-tax revenues.
The Comptroller and Auditor General of India (CAG) in a report also said that dependence of the state government on high interest rate bearing market loans was on an increasing trend to fund its expenditure instead of improving states own revenue resources to generate development funds.
"The overall fiscal liabilities of J&K state have increased from Rs 40,265 crore in 2012-13 to Rs 44,673 crore by the end of March 31, 2014," said the CAG report for the year ended March 31, 2014.
The fiscal debt situation had deteriorated in comparison to the previous year and the state should make urgent efforts to reduce its fiscal liabilities and deficit, the report, tabled in the Jammu and Kashmir Legislative Assembly, said.
Expressing concern over the state debt, CAG said, "the accumulated liabilities were 1.65 times of the Government's revenue receipts during 2013-14 and 4.88 times government's own tax and non-tax revenues during 2013-14."
Asserting that debt sustainability of the state was dismal and the resource gap has also increased, CAG said the dependence of the government on high interest rate bearing market loans to fund its expenditures was on an increasing trend instead of improving states own revenue resources to generate development funds.
The interest paid on market loans by the state government has increased from Rs 234 crore to Rs 1,289 crore.
The development capital expenditure registered a persistent decreasing trend from 2009-10 to 2013-14 indicating that the development works were getting inadequate resources, the report said.
