The tiny hill state of Himachal Pradesh is facing one of its worst financial crises.
The state coffers are virtually empty and have hardly any money to pay salaries to its 261,000 employees and 139,000 pensioners. Expenditure under the two heads during 2014-15 has been estimated at Rs.11,143 crore. Revenue receipts for 2014-15 are estimated at Rs.16,522 crore and expenditure at Rs.23,613 crore.
Official sources said chef minister Virbhadra Singh, who is desperate to redeem the situation, constituted Aug 27 a cabinet sub-committee headed by irrigation and public health minister Vidya Stokes for resource mobilisation and economic measures.
Official sources told IANS that the chief minister met the new central leadership a number of times in the past three months and lobbied hard for a special financial package from the central government to overcome a whopping debt of Rs. 30,000 crore.
Tourism, horticulture and hydropower generation are major contributors to Himachal Pradesh's economic development.
Blaming the previous Bharatiya Janata Party (BJP) government for the fiscal mess, Urban Development Minister Sudhir Sharma said the state has generally been following the pay structure adopted by the Punjab government based on the recommendations of the Punjab Pay Commission.
"The previous BJP government flouted the established norms to increase the employees' pay scales based on the recommendations of the cabinet sub-committee of Punjab that were adopted by Punjab just before the assembly elections for electoral gains," the minister said.
The enhanced pay structure, he said, was implemented by the BJP government in Himachal Pradesh also before the assembly elections, causing an annual burden of over Rs. 1,200 crore. This liability is being discharged by the present government, he added.
Sharma told IANS that even the previous BJP government could not present its case properly before the 13th Finance Commission, which had underestimated the state's committed liabilities.
"The 13th Finance Commission has not even given an equal treatment to the state. It recommended an average increase of 126 percent in total devolution to other states compared to the 12th Finance Commission award, the increase in case of Himachal Pradesh being only 50 percent, the lowest in the country."
"Had we got an equal treatment comparable with overall increase of 126 percent for the country as a whole, we would have received an additional fund transfer of Rs.10,725 crore over a period of five years from 2010," said Sharma, who was authorised to speak on behalf of the government on the state's financial condition.
"The situation has become alarmingly grim during the last two years of the award period of the 13th Finance Commission as the non-plan revenue deficit grants during the financial year 2013-14 have declined to Rs. 1,313 crore from Rs.1,883 crore in 2012-13 and will further reduce to Rs. 406 crore in 2014-15," an official, who wished not to be named as he was not authorised to speak to the media, told IANS.
"We have sent annual plan for 2014-15 to the Planning Commission in which we have sought Rs.2,600 crore under special plan assistance. Since a new institution is yet to take the place of the Planning Commission, there would be delay in the release of special plan assistance, which has put financial stress on the state," he added.
Reacting to the minister's assertions, BJP leader and two-time chief minister Prem Kumar Dhumal accused the present Congress government of making false allegations against the previous BJP government to cover up its failures.
He said the government has gone populist by appointing 30 to 35 chairmen and vice chairmen of autonomous bodies and providing them luxury official vehicles.
Analysing the financial management during the BJP and Congress governments, Dhumal told IANS that his government had raised loans of Rs.6,672 crore during 2008-2012, while the Congress government raised loans of Rs.8,032 crore in its earlier stint from 2003 to 2008 and Rs.4,000 crore in the past 20 months from January 2013.
The Comptroller and Auditor General of India (CAG) said Himachal Pradesh's public debt was a whopping Rs.20,765 crore in 2012-13 and increased by over Rs. 5,000 crore in five years.
The debt from 2008-09 to 2012-13 increased from Rs 15,427 crore to Rs. 20,765 crore, said the CAG report on the state's finances for the year ended March 31, 2013, tabled in the assembly in February.