Shimla: Falling short on resource mobilization, state planners had to drop a proposal for doubling the 12th Five Year (2013-17) Plan Outlay by as much as Rs 5000 crores that could further be curtailed when the planning commission does a balancing act.
“An earlier proposal for a Rs 28,000 Cr plan outlay for the 12th Plan did not take projected revenues into consideration,” says Shirkant Baldi, principal secretary finance.
Though having set an ambitious 9.5 percent growth target for the 2013-17 period, the state planning board came around to proposing a plan outlay of Rs 22,800 crore for the period. The 11th five year plan (2007-12) was approved for Rs 13,868 crore.
Sources said that falling receipts from power sale was a cause of concern and the planners had to scale back the 12th Plan proposals.
“Even the curtailed plan proposal may further be cut when the planning commission assess the states demands vis a vis its revenue generation capacity,” said a senior officer with the planning department on conditions of anonymity.
The release more funds for development purposes, the state from time to time has been asked to curtail non-plan expenditure which includes mounting liabilities on salaries and pension bills that have spiked by as much as 35 percent.
As the state sinks further into debt that has accumulated to about Rs 27,000 crore, another source of worry is the rising costs of debt servicing.
With the government holding back the annual count of employees in the government sector, sources privy to the matter say that after many years of increasing numbers, in the year 2011-12 the number of regular government employees have dropped by about 3000 employees.
While the number of regular employees on the government rolls has dropped that on contract are steadily rising, defeating the purpose of downsizing the government.
Against a employee roll of about 190,560 in 2010-11 to dropping to about 187,000 in 2011-12 the state has also to foot a bill of about Rs 2210 crore for about 1.15 lakh pensioners who are increasing by the year.
Against a salary bill of Rs 4455 crore in 2009-10 it is likely to touch Rs 5882 crore in current financial year that is over 35 percent of the budget, said a source familiar with government accounting.
Impact of the 5th Pay Commission has burnt a huge hole into the state finances as the government still owes about Rs 1000 crore arrears to the employees and will reduce future revenue realizations also, said the official.
To tide over the grim financial situation, chief minister Prem Kumar Dhumal said “We have asked the Prime Minister to provide a special plan assistance of Rs 5214 crore which include Rs 2500 crore on account of special plan assistance and Rs 2714 crore for underestimating the committed liabilities of the state.
Laying the blame squarely at the 13th Finance Commission for the skewed situation, he said the commission had justifiably not considered the state liabilities on account of revision of pay scales and pensions and underestimated the states committed liabilities.