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 2,61,000 employees and 1,39,000 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 Chief Minister Virbhadra Singh, who is desperate to redeem the situation, constituted on August 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 per cent in total devolution to other States compared to the 12th Finance Commission award, the increase in case of Himachal Pradesh being only 50 per cent, the lowest in the country.”
“Had we got an equal treatment comparable with overall increase of 126 per cent 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.