Prime Minister Narendra Modi’s announcement to wind up Planning Commission has set alarm bells ringing in Himachal Pradesh, especially among finance department officials, as uncertainty looms large over special grants for ‘revenue deficit’ State.
“Under the previous system, Himachal was getting special grants as the Planning Commission was liberal in its approach. It enabled the State to bridge widening gap between shrinking revenues and increasing expenditures,” said a senior officer of the State Finance Department.
The official, on the condition of anonymity, said that many times, extra funds allocated to Himachal under successive five year plans have improved roads, healthcare and education standards for an otherwise marginalised hill State.
Chief Minister Virbhadra Singh, in his Independence Day speech at Nahan, announced release of 10 percent DA for Government employees. Talking about states’ precarious finances, an official from the planning department estimated the DA outgo at Rs590 crore.“Himachal is a queer case…In 2014-15 Budget outlay of Rs23,613 crore, the salary bills is likely to exceed Rs9,000 crores, pensions would cross Rs3,500 and about Rs4,500 crore on loan and interest repayments,” said the official.
He added that with the State’s accumulated debt having crossed Rs30,000 crore mark, the runaway expenditure has also impacted State’s plan size. “Where the plan was Rs4,100 crore in 2013-14, it was increased to Rs4,400 crore in 2014-15 that does not even absorb the yearly inflation impact,” he said.“With the State’s own revenues barely crossing Rs5,500 crores, the State’s finances are heavily dependent upon
central grants to bridge the gap,” said the planning department official, requesting anonymity.He said that till the outline of new institution, 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.