WITH ordinary financial relations between the Centre and the state of Jammu and Kashmir being completely transformed from Thursday, the Fifteenth Finance Commission is awaiting a reference from the President of India so that an award could be made for the new Union Territory of Jammu and Kashmir.
“Some special dispensation for the Union Territory of Jammu & Kashmir is likely. This will be in the letter and spirit of the August 5 decision taken by the government,” said a government source who did not wish to be named.
As a state, the size of Jammu and Kashmir Budget for 2019-20 stands at Rs 99,819.89 crore. So far, J&K, like all other states, used to receive a share in the devolution of taxes collected by the central government.
The Centre transfers 42 per cent of the total taxes it collects to states as per the recommendations of the Fourteenth Finance Commission. Among states, Jammu and Kashmir’s share was 1.854 per cent of total taxes devolved. The award of the Fourteenth Finance Commission is for a five-year period ending March 31, 2020.
According to sources in the government, as a Union Territory, Jammu and Kashmir will henceforth not be eligible for grant-in-aid and proceeds from taxes. As a state, it is estimated to receive Rs 1,25,000 crore from the Centre during the five-year award period — 2015-16 to 2019-20 — of the Fourteenth Finance Commission.
The President of India will make a reference to the Fifteenth Finance Commission to include the Union Territory of Jammu and Kashmir in its Terms of Reference and make an award for it. Sources said the Commission may visit the two new Union Territories of Jammu and Kashmir, and Ladakh before finalising its report.
The Finance Commission is scheduled to submit its report to the government before November-end.