Karra flags financial mismanagement in J&K, cites CAG report

19 March 2025

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By: Mubashir Alam Wani

Srinagar: Senior Congress leader and MLA Batamaloo, Tariq Hameed Karra on Wednesday raised concerns over the alleged financial mismanagement in Jammu and Kashmir, citing the findings of the Comptroller and Auditor General (CAG) report.

In the ongoing budget session of the J&K Legislative Assembly, Karra questioned over understated deficits, mounting liabilities, and misclassification of expenditures, which, he said, raise questions over fiscal transparency in the Union Territory.

Karra, while referring to the CAG report, highlighted that the revenue deficit was understated by Rs 200.29 crore, while the fiscal deficit was misreported by Rs 41.53 crore. He pointed out that such discrepancies indicate a lack of accuracy in financial disclosures.

The congress legislator in his question further added that in addition to these miscalculations, the CAG report has flagged J&K’s outstanding liabilities at a staggering Rs 29,335.41 crore.

Moreover, the government has borrowed an additional Rs 2,122.77 crore through JKIDFC (J&K Infrastructure Development Finance Corporation) and Rs 10,321.83 crore through JKPCL (J&K Power Corporation Limited), further raising concerns about the region’s debt burden.

Karra in the question flagged the misclassification of Rs 158.76 crore of revenue expenditure under capital expenditure, which, according to the CAG, distorts budget transparency. By shifting expenses from one category to another, the government may have presented a misleading picture of its financial health, Karra suggested.

In response, the J&K government acknowledged that misclassification of revenue deficit and fiscal deficit occurred but assured that it has been rectified in consultation with the Principal Accountant General (PAG).

The government also defended the borrowing, stating that off-budget loans were used to complete long-pending infrastructure projects and clear power purchase dues, particularly during the COVID-19 period.

The government, in its response further said that CAG Finances Audit Report for Jammu and Kashmir has various positive initiatives and achievements, stating increase in Revenue Receipts Revenue receipts grew by l3 percent in 2021–22 compared to the previous year. Own tax revenue increased by 31.88%, with State GST rising by 32.13% and Excise Revenue by 32.31%. Non-tax revenue also grew by 18.74%, indicating better revenue collection.

“The government maintained a minimum cash balance on 62 days without borrowing. Despite fiscal challenges, the UT was able to manage its finances efficiently, keeping the deficit lower than expected,” the government said in its response.

The government stated that the Capital Expenditure (Capex) in the Union Territory of Jammu and Kashmir increased by 5.51% in 2021–22 compared to the previous year. Capital Expenditure in 2020-21 was Rs 10,470.38 crore, Capital Expenditure in 2021-22 Rs 11,047.03 crore, while the percentage increase was 5.51%.

The government response added that capital outlay on public works increased significantly, with a focus on building roads, bridges, and other public infrastructure.—(KNO)