Himachal Government debt mounts to a whopping Rs 81,0045 Cr 

 Himachal Pradesh Government continues slipping into debt traps as state coffers are under accumulated borrowing of around Rs 81,0045 Crore now. The state’s liabilities are beyond its means as it has increased by more than 3928 Cr and Rs 1259 Cr during the past two years owing to the implementation of a Sixth pay commission on Salary and pension accounts.

Painting the grim picture of state finance the Comptroller and Auditor General of India (CAG) report tabled in the winter session of assembly included Saturday indicates an alarming call to the hill state which is plunging into financial mess.

The BJP government during three quarters and Congress in the last quarter borrowed a new loan of Rs 12,912 Cr Increasing the debt burden on the state was Rs 81,0045 crore till March 31, 2023.

Till April 1, 2022, the total debt was Rs 68,133.72 crore. CAG report said during FY 2022-23 government spent Rs 13742 Cr on the payment of Salary, Rs 9050 Cr on Pension, Rs 4787 Cr on payment of interest, Rs 1154 .80 Cr on Social security pension, and Ra 1907 cr on subsidy. The Government has spent about 62 percent of its revenue expenditure on the payment of salaries.

CAG another report Finance states that the accumulated borrowing bill was Rs 73534 Cr in 2021-22 without mounted to Rs 865689.43 Cr till end of FY 2022 & 2023.

The report said that State debt increased by Rs 13054 Cr in the last two years and the present government took a loan of Rs 10246.85 Cr till March 31, 2023.

According to the Financial Management Responsibility Report of CAG highlighted that revenue and Fiscal deficit of Rs 1368.8 Cr and Rs 2615.59 Cr occurred to the state in the year 2022-23. The fiscal deficit was 5.82 percent of the GDP.  

Government spend Rs 2734 Cr on the Grant in aid. It said the state government has not constituted a sinking fund for loans raised by it in the open market.

Loans out of the collection in the “small savings scheme” and “public provident fund” in the post offices are being shared between the state and the Central governments in a ratio of 3:1.

A separate fund viz. “national small savings fund” was created in 1999-2000 to release loans out of small savings collections.

During 2022-23, repayment of Rs 569.10 crore was made. The balance outstanding at the end of the year was Rs 3,820.66 crore which was 6.83 percent of the total internal debt of the state as of March 31, 2023.

The CAG said in 2022-23 the total contribution to the National Pension System (NPS), which is a defined contribution pension scheme, was Rs 1,782.50 crore — employees’ contribution was Rs 741.59 crore, and the government’s contribution Rs 1,040.88 crore and interest Rs 0.03 crore.

The present government on May 4, 2023, has notified reversion to the Old Pension Scheme (OPS) with effect from April 1.

In a written reply to member Chaitanya Sharma regarding the revenue collection during Question Hour, the Chief Minister, who also holds the Finance portfolio, said the government is making efforts to enhance its tax and non-tax revenues.

The government has implemented the GST Revenue Enhancement and Capacity Building Project, amended the Excise Policy for allotment of retail liquor vends through fresh allotment, and allowed stone crushers to utilize muck generated by the hydel project during the construction of the tunnel after paying an additional amount equivalent to 75 percent of royalty on every ton of mineral.

Replying to a question of how the government plans to address the fiscal deficit of the state, the Chief Minister said in addition to the efforts to enhance the state’s revenues, the government will curtail unproductive expenditure to contain its fiscal deficit.

The government is making efforts to shift towards electric vehicles, and e-offices and also rationalized the institutions which were opened without budgetary provisions, he said.

Regarding whether the central government provided financial grants or lines of credit to the state in post-flash floods, the Chief Minister said the Centre has released Rs 787.25 crore from the National Disaster Response Fund (NDRF).

“Funds amounting to Rs 360.80 crore have been released by the central government which is normal entitlement of the state as per devolution by the 15th Finance Commission. No extra line of credit has been provided by the central government despite repeated requests.

“The state government has notified ‘special relief package’ for the re-construction and restoration of infrastructure in the state,” he added.

Himachal Pradesh has suffered more than Rs 10,000 crore loss due to damage caused to infrastructure during monsoon rains.