A Border Roads Organisation (BRO) worker drives a steamroller while repairing a road surface with tarmac on a section of the Leh Manali highway in Ladakh region | Prashanth Vishwanathan/Bloomberg
File photo of road repair work on a section of the Leh-Manali highway in Ladakh region | Bloomberg
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New Delhi: Low cash balance in the books of the erstwhile state of Jammu & Kashmir (J&K) government is likely to hurt the newly-carved union territory of Ladakh, government sources familiar with the matter told ThePrint.

With most of the state’s physical assets located in the Jammu and Kashmir regions, which have also been converted into a union territory, Ladakh can only stake claim to financial assets and very few physical assets that are outside the state.

The state government’s finances, however, are not in good health, the sources added.

According to the last publicly available data, cash with the J&K government was pegged at Rs 428 crore as of March 2017. A senior J&K state government official said that this cash balance has dwindled further as of March 2019. He, however, did not disclose the exact amount as the data is yet to be made public.

That could pose a serious challenge for the new Union Territory of Ladakh.

The new Union Territories will come into being on 31 October.


Also read: State govt employees can choose between Ladakh and J&K, but final call won’t be theirs 


Physical assets outside the state

Ladakh, however, could get a few physical assets located outside Jammu and Kashmir.

The former state has six properties in Delhi, Amritsar, Chandigarh and Mumbai, which will be divided between the two union territories. These include the Kashmir House on Delhi’s Prithviraj Road and the J&K House in Chanakyapuri.

Sources in the J&K government said that a three-member advisory committee, constituted by the Centre on 9 September to divide the assets and liabilities between the two UTs, is currently looking into the issue. The committee headed by former defence secretary Sanjay Mitra has been given six months to submit its report.

“There is a lot of deliberation going on currently about how these properties, which are prime real estate, will be apportioned,” said one J&K government official who did not want to be named.

Division of other physical assets such as public sector undertakings, hydro-power plants, universities, other institutions such as the J&K Board of Secondary Education and state cultural boards are also being worked out.

“The state has a handful of hydro-power plants. The committee will have to look into how both the UTs will get a fair share,” the official added. “But here again, the power demand for J&K will be far higher than for Ladakh. All these things will have to be factored in.”

As of now, the state where a power plant is located gets a 12 per cent royalty on sales.

The physical assets also include the approximately 10,000 vehicles in J&K and arms and ammunition for the police. Government sources said their distribution will be need based. “For instance, there is no need for bullet-proof vehicles in Ladakh; so they will remain in Kashmir,” said a second official.

The official added that the committee will look into aspects such as area, population, backwardness, remoteness and strategic location while distributing assets.


Also read: The administrative changes that await J&K as it heads towards bifurcation


Ladakh likely to get lesser share of assets, liabilities 

Ladakh is likely to get a lesser share when the assets of the former state are divided, government sources told ThePrint.

Different stakeholders from Ladakh had submitted representations to the committee, when it had visited the region, urging the panel to not overlook the region just because it is small.

Government officials, though, said that if Ladakh wants a higher share of assets, its liabilities will also increase. “Assets will come in proportion of liabilities,” an official said. “One has to take into account the capacity of a small UT like Ladakh to pay the liabilities. It has a population of three lakh people.”

The loans of the erstwhile J&K state will be divided in the ratio in which assets have been created. “It does not make sense for Ladakh to pay for loans for which assets have been created elsewhere,” the official added.

Another government official who did not want to be named said J&K’s overall financial assets is a little over Rs 80,000 crore.

As on March 2017, the latest period for which figures are available in the public domain, the size of J&K’s financial assets is Rs 82,000 crore. These include liabilities on public account (small savings, provident funds, etc) of Rs 30,000 crore and borrowings of Rs 35,755 crore.

“The government’s financial position has not changed much since 2017. In fact, the state’s financial health has deteriorated,” the official said. “Loans will be divided in the ratio in which assets have been created.”


Also read: How 5 key sectors of J&K are getting a makeover before state becomes UT 


 

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3 Comments Share Your Views

3 COMMENTS

  1. Ladakh has always received stepmotherly treatment from the past governments. All the focus was on Kashmir Valley and bulk of the financial assistance was gobbled up by Kashmiri politicians.In Ladakh, there has always been a muted but persistent demand for “Free Ladakh”. At least now, Ladakhis should get their legitimate due. Since Ladakh will have no legislature, its budget will be passed by the Parliament. Parliament should be more liberal with this UT, which has been neglected for a long time.

  2. Ladakh becomes a UT without legislature, so it’s budget forms part of Ministry of Home Affairs budget. It’s share of the consolidated fund of J& K or of other financial assets is irrelevant. Ladakh’s budget can easily double, so all these questions will not have any bearing post Oct 31

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