J&K to raise Rs 3500 Cr bonds to liquidate power purchase liability

JAMMU: In view of whopping losses and accumulated financial burden, the Jammu and Kashmir government has decided to raise Rs 3500 Crore state bonds to liquidate outstanding power purchase liability.

A decision to this effect was taken at a high level meeting chaired by Union Finance Secretary A N Jha in New Delhi Tuesday. The Jammu and Kashmir side was represented by a team of officers led by Principal Secretary, Finance, Navin Choudhary and comprised Commissioner-Secretary, PDD, Hirdesh Kumar Singh besides officers of Finance and Power Development Department. Representative of Union Power Ministry and senior officers of Department of Expenditure also attended the meeting in which “threadbare discussions resulted in an agreed roadmap to raise Rs 3500 Crore state bonds to liquidate outstanding power purchase liability”.

According to Reserve Bank of India regulations, the securities issued by the state governments have to be valued at the market price as against the uniform pricing prevalent earlier. The market price value will allow banks and other institutional investors to differentiate between states based on their financial performance which further induces more competition among the states.

Securities issued by state government are valued based on observed prices. The valuation of traded state government securities has to be at the price at which they have been traded in the market.

According to official sources the meeting chaired by Jha discussed various outstanding financial issues pertaining to the state of Jammu and Kashmir. Issues related to market borrowing by the state for the last quarter of the current financial year was also resolved.

Expressing satisfaction over the outcome of the meeting, Navin Choudhary conveyed that immediate follow up action will be taken by the Finance and Power Development Departments to conclude these issues at the earliest possible.