High government employment mounts Himachal cumulative debt burden

What is cumulative debt of Himachal?

Conflicting papers presented in the Himachal Vidhan Sabha on scrutiny present two sets of figures about the total accumulated debt of the small hill state, leaving one wondering what the actual figure is.

In response to a question by congress leaders Gangu Ram Musafir and GS Bali, chief minister Prem Kumar Dhumal, who holds the finance portfolio, presented papers in the house today that showed the debt position on 31.1.2012 at Rs 25,313.70 Crore.

At the same time in the statements under HP Fiscal Responsibility and Budget Management Rules (FRM), a copy of which was presented in the house with the budget papers on 19th March, has estimated the total debt of the state by end of 2011-12 at Rs 26,608 crore.

A difference of Rs 1294.3 Crore of accumulated debt for a two month period before the financial year closes is simply too large to ignore.

Replying to the budget debate, the chief minister said that when he assumed office in January, 2008 the states accumulated debt was Rs 20,173.14 crore.

With the number of government employees on 31 March, 2011 is stated at 2,25,113; the salary bill for 2012-13 is projected at Rs 6285.10 crores in the FRM statement, the pension bill at Rs 2784.71 Cr and the interest payments at Rs 2249.67 Cr.

The salary bill is expected to increase to Rs 7227.87 Cr in 2013-14, Rs 8312 Cr in 2014-15, Rs 9558.85 Cr in 2015-16, the pension bill is expected to rised to Rs 3229 Cr in 2013-14, Rs 3746 Cr in 2014-15 and Rs 4346 Cr in 2015-16.

Making a comparison with Uttarakhand, Dhumal said that neighbouring hill state was larger in size and population but the employees on its rolls were one-third that of Himachal.

Despite the financial constraints, the government had released financial benefits worth Rs 5400 crore to employees since January 2008, he said.

States own taxes are expected to bring in revenues of Rs 5057.42 crore with the bulk of it Rs 3161.57 Cr from VAT and Rs 800.14 crore from state excise. Non-tax revenues are estimated at Rs 2002.59 Cr, with the bulk of it Rs 1502.70 cr coming from economic services consisting mainly of power sales.

States tax and non tax base for 2013-14 is projects at Rs 7812.2 Cr for 2014-15 at Rs 8832.48 Cr and for 2015-16 at Rs 9959.33 Crore.

The precedent to raise loans to meet expenditure was first resorted when Thakur Ram Lal was the chief minister in the year 1980, said Dhumal.

Mentioning the bar of 35 percent expenditure on employees allowed by the 13th Finance Commission, he said that not only the states salary bill was under assessed but also the increasing pension was overlooked, something which was not in any government’s control, he said.

The chief minister said that opposition congress did not even meet the finance commission when it came visiting the state to study its finances and did not present any memo that could have boosted the states case before it.

The faulty recommendations of the 13th Finance Commission which projected an inflation rate of 2 % against the actual 38% has badly hit the state finances. Had Himachal been treated at par with other states, we would have got additional funds to the tune of Rs 10,725 crore in five years, said Dhumal.

A case seeking financial package of Rs 5214 crore has been presented to the union government for overcoming the adverse impact of the commission but the central government has so far not considered it, he added.

He said state public sector undertakings (SPSU) were commercial concerns and needed to abide by it with the exception of Himachal Roadways which was the sole mode of public transport in the hill state.

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