Treasuries in the State have gone dry. In Jammu region liabilities are to the tune of 2000 crore rupees and in Kashmir region somewhere between 400 and 500 crore rupees. Salaried employees, contractors, pensioners, people with medical claims all are affected by the unusual cash crunch. People cannot get back their own money like GP fund when they need it badly to meet urgent expenditures. This situation has been developing for last two or three months. In one of our editorials two weeks ago we had warned the Government of impending financial crunch and how badly it would affect the people of the State.
The effect of nonpayment of bills of contractors especially in departments where developmental work is undertaken like PDD, PWD, Health etc. has adversely affected the developmental work itself. Some of the development projects have had to be stalled for the time being and at others the work has gone slow or is at standstill. Senior officers of treasuries in Jammu have confirmed to the media that financial crunch is real and although payment of GP Fund, pensions and medical bills are a matter of priority for the Treasuries, yet the impact of crunch is very much there and they are helpless because it is essentially the job of Finance Department to ensure that treasuries are not starved.
The problem of financial crunch arises from the delay caused in passing the annual budget by the Parliament in New Delhi. The annual budget has been presented by the FM in which allocations for the State have also been indicated. But unless a debate takes place on the budgetary proposals in the Parliament and unless it receives formal approval of the house, funds cannot be released. In all probability the matter will drag on to the first week of August and then only can we expect some relief with the first installment of annual budget being released.
The change of Government in New Delhi has caused some delay in getting the annual budget passed on time. But there were sufficient indications in the media that delay could cause some difficulties. The State Government was aware of it and we expected the matter would be taken up with the Union Government at proper time and via media found to overcome the difficulty. Finance Department should have been seized of the situation in advance and it should have taken precautionary steps of how to overcome the crunch or reduce its impact as much as was possible. Perhaps no such exercise has been made.
This situation reflects a grim aspect of financial position of the State. It shows how much dependent we are on financial support from the Union Finance Ministry that we cannot sustain our position for even two or three months of a year. The tight situation will ease after the Parliament passes the budget and funds are released. But it is advisable that the Finance Department has a priority list drawn and circulated to all treasuries. Although the crunch is debilitating all affected persons but even in this situation, some services have to be treated on priority basis. Whatever little money is available should be expended on priority items like GP Fund, Pensions, Medical bills, salaries etc. If some liabilities can be postponed without resulting in grave crisis, this option may be considered.
However a word has to be said by way of ground situation. People should also make their priority list. They should try to show restraint and understand the situation in which the State has landed. Obviously, those whose interests are hurt and whose privileges are denied will protest and bring pressure on the authorities to sort out their problems. But they have to understand the limitations of the Government also. People are expected to show sense of responsibility. Protests do not make the money fall from the sky.
If the current precarious financial situation has any lesson for the Government and the State it is that it should always have a supplementary provision to overcome financial exigency if and when it happens so that the State can sustain on its resources at least for some time and that total crisis does not happen, What can be the possible contours of the supplementary provision is what the fiancé department can initiate for the consideration of the Government or the Legislative Assembly
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