All these are happening in a State where the Government is bankrupt. Where the treasuries are empty and employees and contractors await payment. In Jammu & Kashmir, developmental works have come to a halt and nothing has moved in the state for thepast fortnight.

Sources said bills for Rs 591 crore have accumulated with the treasuries. Besides the Rs 120-crore salary bill for this month is also due shortly. The Jammu and Kashmir Bank has refused to extend overdraft facilities to the Government, which is a major share-holder in the bank. J&K Bank sources said the State Government has already overstretched its overdraft to Rs 960 crore as against the permissible limit of Rs 545 crore set by the Reserve Bank of India. Mohammad Shafi, the finance minister, does not feel the situation is so bad. ``Sometimes the cash gets delayed and these kind of problems do arise,'' he told The Indian Express. When asked about the instances of profligacy, he said `` These are small moneys compared to overall plans of the State.''

The Abdullah Government felt disappointed when Jaswant Singh, the deputy chairman of the Planning Commission, did not come to Kashmir along with the L.K. Advani-led ministerial team. The State Government had requested him for a packageof Rs 9728.80 crore to tide over its non-plan deficit and security- related expenditures.

The only relief came in the last-minute announcement by the Central team about the partial reimbursement of Rs 969 crore of security-related expenditure due for last eight years. The State is now awaiting the promised advance payment against the State's Plan for next year to bail itself out of the financial mess.

Financial experts in Kashmir feel J&K in a state of financial emergency and have suggested massive austerity measures on government overheads. ``A State which is claiming larger political autonomy without a financial base is aspiring for moon,'' said a Kashmir University economics teacher.

Finance Minister Shafi, however, does not agree that the Government was diverting money to the non-priority areas. He asserts that the implementation of the Fifth Pay Commission has put an additional Rs 300-crore annual burden on the State exchequer and arrears of Rs 120 crore, which could be met only with the specialCentral help. Sources said the recent shifting of two senior bureaucrats -- commissioners in charge of finance and planning -- was linked to their assertion for imposing ``financial discipline in the Government''.

Abdullah, sources close to the Chief Minister, told the State Cabinet that the two officers were creating hurdles in the ``developmental works''.