Himachal Pradesh is currently grappling with a financial challenge that has led to delays in the disbursement of salaries and pensions for government employees and retirees.
The state government spends approximately Rs 25,000 crore annually on salary and pension-related expenses, with a monthly expenditure ranging between Rs 2,000 and Rs 2,200 crore solely on salaries, pensions and other allowances.
Rs 10,000 crore debt interest payment
This financial burden is compounded by the state’s debt, with Rs 10,000 crore annually allocated towards principal and interest repayments.
On Tuesday, as the calendar turned to September 3, employees and pensioners were left anxious as they awaited their payments, which usually arrive on the first of the month. The delay has been attributed to the state government’s financial management strategy aimed at avoiding the interest costs associated with borrowing funds to meet salary and pension commitments.
Read Also: https://thenewzradar.com/3-days-on-debt-ridden-himachal-govt-fails-to-pay-salaries-to-its-employees-pensioners/
Payments expected by September 5
According to sources within the finance department, the disbursement of salaries is expected to be completed by September 5th, while pensions will be paid out shortly thereafter. The decision to delay payments was taken to avoid incurring an additional Rs 3 crore in monthly interest, which would amount to Rs 36 crore annually if the government borrowed to meet these obligations on time.
The financial strain on the state is further highlighted by the fact that only less than 40% of the total budget remains available for developmental activities after accounting for salaries, pensions and debt servicing.
The state government has set a target to generate Rs 18,739.39 crore in revenue this year, with Rs 15,100.69 crore expected from state taxes and Rs 3,638.70 crore from non-tax revenues. Additionally, Himachal Pradesh anticipates receiving Rs 18,141.47 crore from the central government through tax transfers.
