​As J​&K Police Budget​ moves to Union MHA Budget, J&K Budget structure likely to change

Srinagar, June 27: In a significant policy shift, the Union Ministry of Finance ​this week approved the inclusion of the Jammu and Kashmir Police (JKP) budget within the budget grants of the Union Ministry of Home Affairs, mirroring the model of the Delhi Police. ​Observers believe that ​t​his decision, first reported by Daily Excelsior on June 26, marks a pivotal change in the financial and administrative landscape of Jammu and Kashmir. ​This shift is also likely to change the structure of J&K’s Budget and overall financial management.
Impact on J&K’s Annual Budget​:

The J&K annual budget has traditionally allocated a substantial portion to security-related expenditures​. Now ​by integrating the JKP budget into the Union budget, a significant financial ​component will be transferred from the J&K UT ​budget to the Union Government​ budget.

In FY24 J&K had allocated Rs 1200 crore for security related expenditure, which includes J&K police administrative costs as well.

​Budget experts maintain that ​this shift can potentially lead to several key outcomes​.

​F​irstly, ​with the JKP budget now managed by the Union Ministry of Home Affairs, the J&K UT government can reallocate its financial resources.

The reduction in security expenditure ​as a proportion of J&K’s overall Revenue Expenditure is likely to improve the capital expenditure-revenue expenditure ratio, in the favour of the former. Lower ​or zero expenditure on policing ​in J&K Budget is also likely to result in reduc​e​d fiscal deficits, ​reflecting better in the overall financial health of the UT. ​Budget experts believe that ​t​his could also potentially lead to improved credit ratings, making it easier for the J&K government to raise funds for various projects.

Implications for Financial Management

The transition of the JKP budget to the Union Ministry of Home Affairs ​would also bring about significant changes in the financial management practices within the J&K UT​.

Being part of the Union budget will subject the JKP budget to increased scrutiny and oversight by central authorities. This could lead to more stringent financial controls and auditing processes, ensuring greater transparency and accountability in the use of funds​, the budget expert said.

​Official sources told Ziraat Times that capacity building within the financial management teams of the JKP and the Home Department​ has already begun. Training and upskilling in central financial procedures and compliance requirements ​are part of the capacity building plan, which are designed to ensure a smooth transition and effective financial management.

The integration of the JKP budget into the Union budget will ​also result in the Finance Department need​ing to revise its strategic planning and budgeting processes. With a significant portion of the budget now managed centrally, the department will have to focus on optimizing the remaining resources for maximum impact.

​Political-economy pundits also see the integrat​ion ​of the JKP budget with the MHA signif​y​ing a decrease in J&K’s fiscal autonomy. ​For instance, they ​b​elieve that the UT’s Finance department will have less control over a major expenditure category. This could lead to a reliance on central directives and a decrease in the department’s experience in handling such a large budget allocation.

Civilian oversight question

Political observers also believe that such a development, in the near term, might also result in ​t​he erosion of civilian oversight of the police force​. Some political leaders believe that this could mark the official start of Delhi’s full control and administration over J&K Police on the lines of Delhi Police.