Official statistics indicate that the State has an overdraft of Rs 950 crore from the J&K Bank, unpaid bills of 1998-99 amount to Rs 350 crore and the Power Corporation owes dues worth Rs 650 crore.

The Kargil crisis and tension along the Line of Control (LOC) have further hit the Tourism Industry which is the mainstay of the State's economy. The business had just started looking up after ten bleak years and would have to a great extent eased the State's financial pressures.

But the main culprit for the financial crisis is not the war but the `hartal' politics which political outfits resort to at the drop of a hat to discredit the State Government and in doing so they inadvertently torpedo the State's economic growth and open a Pandora's box for thecommon man.

A senior State Government official told UNI that the State is in a fiscal mess and the Government has to seek the Centre's assistance everytime to pay salaries and for other expenditures. Even developmental projects are stalled for want of funds.

He said the situation is worsened by the frequent strikes called by employees' organisations and political outfits, chiefly the Hurriyat. ``Such `hartals' are usually organised at the time of elections under the pretext of being peoples' movement. This had been noticed during the previous elections and is apprehended in the coming polls as well,'' he said.

Due to the strikes a State Government employee wastes most of the days out of the 232 days of work in a year while anyway availing of 133 holidays including 52 Sundays, 27 State Government holidays, nine provincial holidays, 15 casual leaves and 30 earned leaves.

But the demand by the employees for the extension of benefits of the Fifth Pay Commission has added an annual burden of Rs 700 croreon the State.

Arrears with people on account of taxes for the period of militancy amount to Rs 500 crore. Non-reimbursement under security related expenditure (SRE) of salary of migrant employees and salary support to PSUs, besides the reimbursement of admitted items of SRE amounting to Rs 250 crore, has further aggravated the financial situation.

The annual salary bill of the State is a whopping Rs 3,600 crore while annual resources account for only Rs 600 crore. ``The state cannot even generate enough money to pay its employees,'' official sources said.

State Government employees are demanding immediate disbursement of Central Fifth Pay Commission arrears which include three per cent installment of arrears due from January 1, 1998 in cash and release of six per cent Dearness Allowance (DA) installment due from the same time in cash. They are also asking for wage enhancement for daily wagers, and the introduction of a passbook system along with an enhancement of medical allowance from Rs 80 to Rs 200 amonth and bonus to all State employees.

However, the State claimed that the employees and pensioners had been granted benefits of the Fifth Pay Commission on the central pattern from January 1, 1996 with suitable modifications.

The benefits include pay and pension revision, city compensatory allowance of Rs 120 a month from January 1998 on par with the Central Government employees as against Rs 20 earlier.