Report on Central grants to Jammu and Kashmir
A study has revealed that Jammu and Kashmir has received 10% of
all Central grants given to states over the 2000-2016 period, despite having
only 1% of the country’s population.
Highlights:
- Uttar Pradesh makes up about 13% of the country’s population but received only 8.2% 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.
- The state received Rs.1.14 lakh crore in grants over the sixteen years under review. This is more than a quarter of the Central funds disbursed to the 11 special category states in that period.
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. This has led to a ballooning of Jammu and Kashmir’s share in the total non-plan revenue deficit of all states. which has, in turn, meant that the Centre has had to send it more money to finance this deficit.
- Another reason lies in the Centre’s treatment of the north-eastern and hilly states. Plan Grants were stopped by the Twelfth Finance Commission except for the north-east states and hilly states including Jammu and Kashmir. Thus, Jammu and Kashmir and other hilly states continue to get the Plan grants while others do not get it.
