Dr Ghulam Mustafa
Ladakh has come a long way in the last four and a half years, since becoming a Union Territory. Every financial year, the union Government allots a substantial amount of budget to the region’s growth and development. Ever since Ladakh became a Union Territory, significant attention has been paid to addressing the infrastructural bottlenecks that have existed hitherto, including those in power, roads and bridges,telecommunications,education, health among others.
On February 1, 2024, Finance Minister Nirmala Sitharaman presented the fifth budgetary allocation to UT Ladakh since 2019. As Ladakh is a Union Territory without legislature, all its grants are released by the central government after finalisation by the Union Ministry of Home Affairs. The interim union budget for 2024-25 includes a sum of Rs 5958 crore for the Union Territory of Ladakh for the upcoming financial year. The grants were the same as those granted in the 2023-24 fiscal year. Of the allocation, Rs 2881.84 crore has been allocated for Revenue expenditure and Rs 3076.16 crore for Capital expenditure.
The power sector has received a considerable boost as the Government has allocated Rs 189.58 crore, while, Rs 68.44 crore has been allocated for medical and public health, Rs 63.77 crore for rural development, Rs 36.67 crore for roads and bridges, Rs 32.05 crore for civil aviation, Rs 28.09 crore for public works, Rs 21.30 for tourism, Rs 23.10 for social welfare among others. The tribal area component has been allocated Rs 3163.34 crore whereas a total of Rs 632.18 crore was allocated to the total schemes of union territory.
The UT Ladakh was allocated equal funding for the previous four fiscal years 2020-21, 2021-22, 2022-23, as well as the current fiscal year 2023-24. However, the Revenue and capital grants are not the same. While the capital expenditure for the 2020-21 fiscal year was Rs 3626.28 crore, it dropped to Rs 3076.16 crore in 2024-25. In contrast, the revenue expenditure for the 2020-21 fiscal year was assigned Rs 2331.72 crore, but it increased to Rs 2881.84 crore in 2024-25.
From roughly Rs 1135.56 crore in 2018-19, which was before to the creation of the Union Territory, to Rs 5958 crore in 2024-25, the budgetary provisions for Ladakh have increased by more than five times. For the fiscal years 2020-21, 2021-22, and 2022-23, the actual budget allotted is Rs 2373.74 crore, Rs 5060.47 crore, and Rs 2869.02 crore. This indicates that 39.84%, 84.94%, and 48.15% of the available funds have been actually allocated or utilised. The MHA has previously recognised the lower spending to a number of factors, including short working season, shortage of technical field staff, labour shortage during Covid, and others for the underutilisation of funds.
Compared to the financial year 2020-21, the financial year 2021-22 saw a significant improvement in the use of finances. However, in the fiscal year 2022-2023, it decreased. The government has implemented a number of measures to ensure that funds are used as efficiently as possible. These include approving the Annual Action Plan each year in April, releasing funds to line departments at the start of the fiscal year, introducing the Ladakh Integrated Financial Management System (LIFMS), and training staff members to use the Public Financial Management System (PFMS), Government e-marketplace (GEM), e-tenders, e-office, project management, and other systems.
Infrastructural development is fundamental for Ladakh to prosper economically. With the increasing budgetary allocations from the centre govt, there has been a considerable focus on infrastructure development over the years. The comprehensive development of green energy, telecommunication, road networks, sports, grid transmission lines, and infrastructure for health and education. In addition, a number of Centrally Sponsored Programmes, including PMGSY, CRIF, Jal Jeevan Mission, and PMAY, are being carefully observed in their implementation. To boost the number of tourists in the region, the infrastructure related to tourism and the revival of cultural heritage are being given top priority.
The increased funding allotted to the Ladakh Autonomous Hill Development Councils (LAHDCs) of Leh and Kargil districts, which gives these local governing bodies the authority to start development initiatives that benefit the local populace, is another noteworthy development in Ladakh. From Rs 166.04 crores in 2019-20 (before to the creation of UT) to Rs 668.00 crores in 2023-24, there is an increase in funding given to the LAHDCs. Additionally, the funding allocated to Block Development Councils has also been raised to support village-level development initiatives and financially support Panchayati Raj Institutions (PRIs). Sindhu Infrastructure Development Corporation, Ladakh Integrated Financial Management System, and Public Financial Management System are some of the major steps taken by the UT administration to maximise the fund utilisation received from the union government.
Overall, the government’s dedication to promoting Ladakh’s overall development is demonstrated by the Union Territory of Ladakh’s constantly larger budgetary allotment. The guiding principles of Vision 2047 for Ladakh are guided by four principles – self-sustainability, smart infrastructure, carbon neutrality and integrated development. The two LAHDCs, the PRIs, and UT administration must collaborate well in order to achieve these goals. It is imperative to augment the budgetary allocations for the PRIs, municipal committees, and LAHDCs in Leh and Kargil to ensure that the advantages of progress and advancement must trickle down throughout the region.
In order to compare its economic trajectories with those of the other Indian states and union territories, Ladakh must now work to obtain its economic indicators, such as Annual GDP, Per Capita GDP, Exports and Imports, Investments, Mining and quarrying, Agriculture and allied sectors growth, Industrial growth, Services sector growth, and others. It is imperative that Ladakh has to be at the forefront of the parameters of economic, environmental and human development.Ladakh must endeavour to be the best Union Territory in developed India.
(The author is currently working as an Assistant Professor of Economics at University of Ladakh.)
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