Shimla : Himachal Pradesh Chief Minister P.K.Dhumal is on a spree to please-all ahead of the state assembly polls later this year.
The debt-ridden state, which is already reeling under the ever-swelling wage bill, is doling out largesse, especially for its babus – both serving and retired – who constitute a sizeable chunk of the electorate in the hill state with over 4.6 million voters. The polls are due in December.
In just over a month, Dhumal, who took over the reins of the state for the second time Dec 30, 2007, announced the release of Rs.825 crore arrears due to employees and pensioners on account of the recommendations of the Fifth Pay Commission.
Besides, he announced an increase in the house rent allowance (HRA) of employees and enhanced wages of 37,000 anganwadi functionaries and ordered the release of their arrears due since April 2011.
Government officials said the increase in HRA would put an additional financial burden on the state exchequer to the tune of Rs.100 crore. Likewise, the salary bill of anganwadi functionaries would be enhanced by more than Rs.11 crore per annum.
Dhumal said: “The BJP (Bharatiya Janata Party) government is committed to safeguarding the interests of every section of society.”
He said the state has provided record financial benefits worth Rs.5,568.95 crore to over 200,000 employees in the past four years.
Likewise, for the subordinate employees of judicial courts the government last month approved a proposal to implement the Shetty Commission recommendations regarding the grant of allowances.
Unable to meet its growing expenditure with tax and non-tax revenue generation, the state has increasingly fallen back on borrowings, and in the process the hill state’s loan liabilities have risen by over Rs.5,400 crore in the past three-and-a-half years.
“Till date, the state’s loan liability is over Rs.26,500 crore. It was Rs.27,603.66 crore, including outstanding guarantees of Rs.2,858.38 crore in the context of public sector undertakings, as of June 30, 2011,” Pradeep Chauhan, adviser to the economic and statistics department, told IANS.
“As of December 2007, these liabilities were Rs.22,189.91 crore,” he said. Undoubtedly, this has increased the state’s financial woes.
Dhumal had earlier informed the state assembly in a written reply that the central government had fixed a borrowing ceiling of Rs.1,647 crore for this fiscal.
“Efforts are being made by the state government to increase its own tax and non-tax revenue to remain within the authorised ceiling,” Dhumal had said in the assembly during the monsoon session last year.
The state has its own sources of tax and non-tax revenue. Non-tax revenues are mainly the sale of electricity and royalties on forest produce and extraction of minerals, according to the chief minister.
The chief minister blamed the central government for the state’s poor financial position.
“The 13th Finance Commission has done injustice with the state,” Dhumal said. “The centre has been given a 125 percent raise over the 12th Finance Commission. We have merely got a 50 percent hike. Some states got more than 150 percent.”
During his budget speech last year, Dhumal said out of the total budget, only 32.95 percent would be utilised for development activities, the rest would go towards meeting the liabilities on account of salaries, pensions, interests and loans.
“Out of every Rs.100 spent, salaries will account for Rs.35.20, interest payments Rs.12.87, loan repayments Rs.5.75, and pensions Rs.13.23. The remaining Rs.32.95 will be spent on development work and other activities,” he said.