Financial crisis, mounting debt to weigh on Himachal budget

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Shimla: In deep shadows of a financial crunch and a mounting debt burden, the Himachal budget session that begins on Monday leaves little room for populist measures as chief minister Prem Kumar Dhumal would present his fourth budget in his second term in office.

With a overhang of an accumulated state debt burden having crossed Rs 27,000 crore, a reduced non plan revenue grant recommended by the 13th Finance Commissions, mounting pressure for release of employee pay arrears and compulsions of competitive populist politics as the ruling party heads into the election year leaves very little maneuverability for pandering to rising expectations.

The 40 day session to be held in the freshly renovated council chamber has 24 sittings marked, during which the budget is to be presented on March 9 and will also take up important legislations like an amendment to the HP Fiscal Responsibility and Budget Management (Amendment) Bill for discussion.

Speaker Tulsi Ram let media person on Saturday know that Rs 34 lakhs had been spent to spruce up the Vidhan Sabha’s historic council chamber. “The renovation was overdue as the last one was carried out in 1988,” he said.

Pinning hopes on an enhanced proposed annual plan of Rs 3300 crores, the government intends to broaden the development agenda of taking up new projects but meeting out a Rs 1900 crore pay arrear bill on account of pay revision is proving to be a bitter pill hard to swallow unless the central government bails out the state. Last year the plan size was Rs 3000 crore.

Dhumal has sought Rs 2500 crore as central assistance and Rs 1500 crore as special plan assistance for 2011-12 to tide over the crisis.

“The government is in deep financial trouble,” said a finance department official on conditions of anonymity. “With inflation in double figures, the current years’ salary bill which includes enhanced dearness allowance is likely to be around Rs 4000 crore. In 2012-13 it is likely to be Rs 4800 crore and unless the government finds additional resources or gets outright central grants, making ends meet is not going to be an easy task,” he added.

With expenditures likely to be tightened everywhere, working of legislators is also coming under increasing public scrutiny as their salary and allowances bills mount and working time reduces.

An RTI query by Hill Post revealed that for holding 26 sittings of the 2010 budget session, the Vidhan Sabha paid Rs 16.12 lakhs as TA/DA bills to 44 legislators for attending 80 hours and 31 minutes of house business, with the shortest session of 50 minutes held on 6 April, 2010 did not even complete the mandatory question hour.

Editor-Reporter with Hill Post, Ravinder Makhaik as a journalist has for over two decades worked for India’s leading newspapers and television networks.

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