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HomeHimachal PradeshHimachal govt incurs Rs 5000 to Rs 6000 cr debt per year,...

Himachal govt incurs Rs 5000 to Rs 6000 cr debt per year, manages to repay half

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Rs 45,000 annual expenditure, income per year is Rs 10,000 cr

In-depth Report by Special Correspondent

Dharamshala | TNR

The financial woes of the state government seem to be mounting with each day. With empty coffers staring large in the face of the government, it is forced to take loans of thousands of crores each year to bridge the income-expenditure gap.

 Loss making corporations and boards are also spoiling the financial health of the government.

Government budget The total budget of this debt-ridden state hovers around Rs 44,0000 crores but the government is able to raise only Rs 10,000 crores annually from various sources.

Currently the state has a debt of about Rs 62,000 crores and the situation is so serious that the government has to take a new loan to repay the previous loan.

Every year, the state government takes a fresh loan of about Rs 5000 to Rs 60006 crores, while returning Rs 3000 crores of the loan taken earlier. The debt graph is therefore rapidly.

Fresh loan taken Recently, the government had to take a loan of Rs 1000 crores over and above its existing debt to pay off a 6 per cent DA and other allowances to about 3 lakh employees in the state.

Even in the event of the implementation of the recommendations of the new Pay Commission, the government will have to raise Rs 8000 to Rs 10,000 crores. In such a situation, the debt burden on the government will increase further.

What experts say A discussion with various experts on the growing debt brought out the conclusion that that the only solution would be for the government to make an effective plan to increase income in various sectors including tourism and electricity along with financial discipline.

Experts suggested that the tax structure will have to be strengthened further along with curbing wasteful spending in government departments.

5 ways to increase revenue According to experts, sectors like tourism, hydropower and horticulture can help the state to become self-reliant by taking it out of the debt trap.

1.New tourist spots should be developed Income can be increased by developing new tourist spots in the state and creating infrastructure in the existing tourist spots. In this case, the Goa model needs to be followed. Health and conference tourism will have to be promoted. More than 196 lakh tourist visit the state annually, which is 2.9 times more than the total population. Apart from the famous tourist places, people also visit religious and historical places. The homestay scheme has also attracted tourists towards villages. Tourism contributes 6.6 per cent of the state’s GDP.

2. The state has a valuable natural resource in the form of hydroelectricity, which can be fully exploited to better the state’s financial condition. About 24,000 MW of hydroelectric power can be harnessed in the state. Out of this about 10,547 MW of electricity has been harnessed so far. BBMB including, steps will have to be taken to increase the share of the state in  other central and inter-state projects.

3.Demand for Green Bonus will have to be reiterated strongly
There is currently a ban on felling of trees or Green felling. In this connection, the government has been persistently demanding a “green bonus” from the Central government. The income of the  state can increase if the Centre agrees to provide a Green Bonus. To make this a reality, the government and the MPs of the state will have to make their voices heard strongly in New Delhi.

4.Improving the economy through apple production.
The governments revenue can also increase by promoting apple horticulture which is worth about Rs 3500 crores in the state.About 1.60 lakh families are associated with apple production, a major contributor to the state’s GDP contributing about 12 per cent. Apart from this additional revenue can also be raised by promoting citrus fruit production and organic farming on a large scale.

5.Increasing revenue through sale of khair trees
The deputy chairman of the Planning Commission, Ramesh Dhwala has already presented a formula to the state government to increase revenue through sale of khair trees that are spread over lakhs of hectares of forests of the state. The government has started work on this as a pilot basis, which now has to be taken up more seriously so that a good revenue can be got from the sale of these trees.

Sources of the government’s income

A maximum amount of about Rs 2500 crores from the Excise and Taxation department.Rs 1,500 crores from the power sector Rs 250 crore from mining Rs 200 crores from forests and the remaining amount from tax derived from other sources

Rs 66,000 loan per Himachali

The per capita income in the state is currently close to Rs 66,000. The CAG report has also reprimanded the state government for failing to maintain financial discipline. The per capita debt burden of the state has increased by 50 per cent during the last five years.

Experts say There should be more focus on the manufacturing sector

Taking loans is not a bad thing but the resultant increase in income of the state on the basis of this loan is important.

The production sector in this state needs more attention.Whether it is the hydropower sector, income from tax or a matter of finding additional resources.

Deepak Sanan, retired additional Chief Secretary
The government should stick to the budget

The government will have to refrain from populist announcements other than the provisions of the annual budget by bringing in fiscal discipline.

There is also a need for continuous monitoring of projects of various departments. Industries will have to be promoted according to the geographical condition of the state. Strict steps will have to be taken in the direction of reducing non productive expenses as well.

KC Sharma, former joint finance secretary
There is a need to bring more projects from the Centre
The government needs to increase income in power generation, tourism, agriculture, horticulture and forest sector.

Along with the emergence of new tourist places, emphasis should also be laid on increasing infrastructural facilities in existing tourist spots.

The state has benefited from getting a special category status. There is a need to bring more projects from the Centre.

KR Bharti, former special finance secretary

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