Leh: The Ministry of Finance has recently reinstated the Rs. 100 crore Capital Expenditure (Capex) budget for the Ladakh Autonomous Hill Development Councils (LAHDCs). The decision comes after significant cuts to the budget last year, which had raised concerns about the impact on developmental activities in the region. With the restoration of funds, local leaders are hopeful that ongoing projects will be completed on time and that the financial challenges faced by contractors and departments will be addressed.
Dr. Pawan Kotwal, Advisor to the Lt. Governor of Ladakh, chaired a meeting on January 13 to review the SDP/State Capex expenditure and plan the utilisation of the additional Rs. 400 crore released for Ladakh. He urged officers to use funds promptly, clear liabilities, and ensure fiscal responsibility, timely execution, and collaboration to address any challenges during the implementation.
Adv. Tashi Gyalson, Chairman/CEC, LAHDC, Leh extended sincere gratitude to the Prime Minister, Home Minister, Finance Minister and Lieutenant Governor of Ladakh for their continued support towards the development of Ladakh. He said that the restoration of the Capex budget reflects the government’s commitment to Ladakh’s growth, ensuring that crucial infrastructure and development projects continue without interruption
Deldan Namgyal, former MLA of Nubra, stated, “The annual CAPEX budget for each LAHDC is Rs. 350 crore. A few months ago, Rs. 109.16 crore was deducted from the budgets of both Hill Councils. Although Rs. 100 crore has now been restored, we are still short of Rs. 9 crore. During the first round of talks between the High Power Committee and the Ministry of Home Affairs (MHA), the third agenda item was the restoration of budget cuts of both the UT and the LAHDCs.
“Many contractors have suffered as a result of this budget cut, creating considerable liabilities. Development activities have also been adversely affected. With only three months remaining in the financial year, it is not feasible to identify and execute new projects, especially under such harsh conditions. Therefore, the focus can only be on clearing the liabilities for 2024-25. Both LAHDCs need to address all existing liabilities and carefully identify developmental works. I hope this allocation will be utilised appropriately,” Deldan added.
Questioning the logic behind the MHA’s earlier decision, Deldan said, “My point is, why did the government cut the budget in the first place if they had to restore it later? There’s no logic to this decision. The cut was implemented before the talks began, and unnecessarily, this issue was included in the meeting. Moreover, it wasn’t even part of the original four-point agenda. I feel they just wanted to make it an agenda item for the sake of discussion.”
Deputy Chairman, LAHDC Leh, Tsering Angchuk, stated, “Our goal is to utilise the allocated funding within the same financial year. As per past practices, we have consistently achieved this. This year, significant efforts have been directed towards the education and health sectors. However, the budget cut of around Rs. 100 crore impacted our targets. Now that the budget has been restored, we can address all pending issues and clear liabilities. This will enable us to pay the contractors on time.”
He continued, “In the UT SDP budget, a significant amount of nearly Rs. 976 crore has been reduced. The inability to fully utilise the budget has a widespread impact on us. In contrast, the Council has maintained a record of 99% expenditure. Additionally, we have requested extra funds in the revised budget. Our working season is very short, and we must complete all execution and physical achievements by December. Our physical achievement rate is 100%, and from January onwards, all bills are prepared and cleared without delay.”
Dr. Mohd Jaffer Akhoon, CEC LAHDC, Kargil, said, “I would like to express my gratitude to the Prime Minister, Finance Minister, Lt. Governor of Ladakh, and MP Ladakh for restoring the budget, particularly the CAPEX budget of the LAHDCs. Without this restoration, our developmental activities would have been severely affected. Both LAHDCs, being elected representative bodies, plan projects within the stipulated five-year timeframe. It is essential that there are no budget cuts for the LAHDCs.”
“When Ladakh was granted UT status, it was announced that Rs. 50,000 crore would be allocated over five years. However, we have only received Rs. 25,000 to Rs. 30,000 crore so far. When the budget was reduced, we refrained from including any projects under the State Sector, which had a negative impact on development. At the very least, the funds allocated to LAHDCs should not be reduced, and we are thankful that this has been ensured. Our expenditure consistently ranges between 99% and 100%,” added Dr Mohd Jaffer.
Speaking about the UT budget (Special Development Package), Deldan Namgyal said, “Around Rs. 976 crore has been reduced from the UT budget. While an additional Rs. 400 crore has been restored, we are still short by Rs. 176 crore compared to the previous budget. This is a significant shortfall. Due to this reduction, many developmental works have suffered as project costs had to be scaled down, and the DPRs were adversely impacted. I hope the UT administration will ensure that all the identified works for 2024-25 are restored. The UT budget is considered a landmark budget since most of the developmental projects are executed under it.”
Further, Deldan Namgyal said, “Normally, in principle, the CAPEX budget should increase by 10% annually, whether it’s for a UT or a state, to account for cost escalation of materials and other expenses. However, instead of increasing the budget, it has been further reduced, which is unfortunate. I urge the Government of India to take this into consideration. Ladakh has a very limited working season, and it is crucial to enhance the budget by 20% annually for both the LAHDCs and the UT. This is the only UT where developmental works can be executed for just six months due to the harsh climate, and our financial period is also significantly shorter.”
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