The Planning Commission has agreed to increase central assistance to Jammu and Kashmir by 33 per cent, said J&K Chief Minister Mufti Mohammad Sayeed on Thursday.
"The central assistance allocation has been raised from Rs 2,500 (Rs 25 billion) last year to Rs 3,100 crore (Rs 31 billion) this year," he said.
The Mufti spoke to the press after his meeting with K C Pant, Deputy Chairman of the Planning Commission.
"Last year we had used 91 per cent of the funds. This is a big achievement from our point of view," The J&K chief minister said.
Asked how he planned to use the additional funds, the Mufti said the state government wants to build up a contingency fund from this surplus money.
"The loan component in this year's allocation is down substantially. We are now going to enforce strict fiscal discipline by adhering to the Reserve Bank of India's guidelines. We are making unprecedented efforts to generate additional resources. A big drive will be launched for the recovery of arrears, especially in power sector. We are also announcing our own medium-term fiscal program, including the setting up of a 'sinking fund.' We have asked for an additional Rs 100 crore (Rs 1 billion) in the form of grant for seed capital for the formation of the consolidated sinking fund that we plan to set up," he added.
He refused to take any political questions from the media persons who were earlier given the impression that the Mufti might speak about Indo-Pak relations.