Shimla: Prime Minister Narinder Modi’s Independence Day announcement to wind up the planning commission has here set alarm bells ringing, especially among finance department officials, for uncertainty about special grants for revenue deficit Himachal Pradesh hangs in the balance.
“Under the old dispensation Himachal did get much special grants as the planning commission was liberal in granting funds that enabled the state to bridge the widening gap between shrinking revenues and increasing expenditures,” said a senior officer of the finance department.
The finance department officer, not wanting his identity disclosed, said that many times extra funds allocated to Himachal under successive five year plans have improved roads, healthcare and education standards for an otherwise marginalized hill state.
Doing away with the command economy structure by drawing curtains on the Nehruvian institution set up by an executive order has also jolted the state planners here.
Chief minister Virbhadra Singh in his Independence Day speech at Nahan announced release of 10 percent DA for government employees. Talking about the states precarious finances, an officer from the planning department put the DA outgo at Rs 590 crore.
“Himachal is a queer case,” said. “In the 2014-15 budget outlay of Rs 23613 Crore, the salary bills is likely to exceed Rs 9000 crores, pensions would cross Rs 3500 and about Rs 4500 crore on loan and interest repayments.”
With the states accumulated debt having crossed the Rs 30,000 crore mark, the runaway expenditure has also impacted the states plan size. Where the plan was Rs 4100 crore in 2013-14 it was increased to Rs 4400 crore in 2014-15 that does not even absorb the yearly inflation impact.
“With the states own revenues barely crossing Rs 5500 crores, the state’s finances are heavily dependent upon central grants to bridge the gap,” said the planning department official on conditions of anonymity.
Till outline of the new institution announced in place of the planning commission is drawn up, we are unsure whether the state stands to gain or lose its favoured status under the planning commission dispensation, he said.