An interest-free Central Government funding has sparked major controversy in Jammu and Kashmir after the Congress, alliance partner of the ruling National Conference, joined issue with the Opposition People's Democratic Party and blamed the Omar Abdullah government for pushing the Union Territory into a debt trap.
Chief Minister Omar Abdullah has dismissed allegations and termed the Rs 3,000 crore loan under Special Assistance to States for Capital Investment or SASCI to Jammu and Kashmir as a major success for his government.
Abdullah has said it is a 50-year interest-free loan. which other states including Congress ruled Himachal Pradesh, have also availed.
"The decision to bring J&K under SASCI reflects the confidence of the Government of India in the reform orientation, financial discipline, and execution capacity of Jammu & Kashmir government," Abdullah said.
According to the Ministry of Tourism, 100 per cent central funding is given to states to develop iconic tourist centres to global standards.
Under the guidelines, the projects are implemented and managed by the state governments. They have to be developed and completed within a maximum of two years.
There was an uproar in J&K assembly over SADCI funding to J&K.
While speaking on the budget, J&K Congress chief Tariq Hamid Karra accused the government of poor financial discipline and misplaced priorities. He said only 12 per cent of budget has been utilised in J&K and Rs 1 lakh crore of allocated funds remains unspent.
"Why is the government borrowing under SASCI when such a huge amount remains unspent? The government has spent only 12 per cent of the budget, which shows very poor financial discipline. Yet it is borrowing under SASCI, which will put J&K under a debt trap," said Karra.
The issue was first raised by Wahid ur Rehman Parra of the PDP. The Congress followed suit, indicating deepening gap within the alliance.
Karra said the "Alliance with the National Conference is intact, but he cannot remain silent on such issues".
Both PDP and the Congress terms funding under SASCI a dangerous proposition in case the government fails to repay the debt.
Parra questioned who will repay the loans after 50 years.
The SASCI is a scheme to "borrow from the market" and in case the government fails to repay, the company can take over any road or infrastructure project, he added. "You are effectively mortgaging Jammu and Kashmir. Read SASCI first. It is a dangerous scheme. It is money borrowed from market," said Parra.
After the PDP, the Congress warned the government of "unchecked borrowing and long-term repercussions for Jammu and Kashmir.
