Behind Trivendra Rawat no to farm loan waiver, a cash-starved treasury
About 80% of the state’s annual budget goes into meeting committed expenditures like employee salaries, emoluments or retirement benefits like pensions and gratuities .dehradun Updated: Nov 04, 2017 20:55 IST
Salaries and emoluments of nearly two lakh employees eat into a large chunk of revenue forcing the cash-crunched Uttarakhand government to walk a tightrope while sanctioning development work, officials in the know of administrative working said.
In fact, chief minister Trivendra Singh Rawat on Friday ruled out any loan waiver to farmers and asserted his government would instead provide soft loans at nominal interest. This was despite farmers in Haridwar recently staging a protest demanding for a loan waiver.
“The real reason behind such a situation is that a major chunk of the state’s annual budget goes into paying salaries and emoluments of employees,” said a source in the finance department. “The heavily skewed financial allocations badly affect development in the resource-crunched state.”
“On top of it, the government’s receipts coming from limited sources like mining and liquor are also declining,” a source in the chief minister’s office (CMO) said. “They (receipts) further declined recently due to complications that arose following enforcement of the Goods & Services Act . As a result, the government is heavily dependent on borrowings from various sources, including the Reserve Bank of India.”
Finance secretary Amit Negi told Hindustan Times that efforts were on to enhance revenues from various resources. “The government has various sources of revenue. We are making every effort to augment our receipts through those resources,” he said.
Sources said the state’s annual budget for the ongoing fiscal is Rs 4,000 crore. “Its major chunk---about 80%-- goes into meeting committed expenditures like employee salaries, emoluments or retirement benefits like pensions and gratuities,” a well-placed source in the finance department said, adding that there were about two lakh state employees in Uttarakhand.
“The financial burden on the exchequer mounted after the government paid employees all pending arrears as per the Seventh Pay Commission’s recommendations,” another official said, adding many states have refused to pay arrears to their employees.
“They refused to pay long pending arrears fearing such a move would end up badly affecting their economy,” an official in the finance department said, adding such strictness “can’t be observed” in Uttarakhand because state employees are a much pampered lot as they constitute a solid vote bank of politicians. “They go into a protest mode or start observing strikes the moment the government tries to exercise financial discipline.”
Another official indirectly blamed politicians for the situation, saying those in power always try to pamper the two lakh workforce. “Besides, they keep announcing populist schemes without realising that the government has a limited kitty and its revenue sources too are limited,” the official said.
Time had come for the state government to spend budget more on infrastructure development, a source said. “Spending more on development tends to enhance the state’s GDP, which in turn, will increase our tax base,” he said. “Expansion of tax base means more revenue which can be spent on development.”