Himachal Pradesh's Economy Faces Challenges, Reports Fiscal Responsibility and Budget Management
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Dharamsala, Dec 21 (NationPress) The economy of Himachal Pradesh, which primarily relies on horticulture, tourism, and hydropower, is under severe pressure as highlighted in the Fiscal Responsibility and Budget Management (FRBM) report. This report was presented by Chief Minister Sukhvinder Singh Sukhu on the final day of the legislative assembly session here, stating that "there is a necessity for extraordinary efforts to alleviate the economic strain caused by a reduction of Rs 1,800 crore in the revenue deficit grant for the current fiscal compared to the previous year."
As per the report, the estimated revenue deficit by December stands at Rs 1,493.25 crore, exceeding the budget forecasts. The surge in revenue deficit is attributed to increased spending on salaries, pensions, and subsidies. It is projected that the revenue deficit could escalate to Rs 6,006.86 crore, marking a rise of Rs 1,493 crore in the FRBM.
Moreover, the fiscal deficit is anticipated to reach Rs 6,836.64 crore, reflecting an increase of Rs 2,308.11 crore.
Experts informed IANS that this FRBM report arises amidst the Congress government in the state contemplating delays in employee salaries and considering the rollback of doles and perks promised during the assembly elections.
The report indicates that alongside rising expenditures, the expectation for revenue receipts in the state has also become unbalanced, particularly concerning the pending water cess that has been tied up in courts, leaving Rs 1,000 crore "in limbo."
Additionally, the revenue deficit grant for the current fiscal has seen a decline of Rs 1,800 crore compared to the previous fiscal year.
The lack of this amount from the Central Government has been a contributing factor to the escalating revenue deficit. This fiscal year anticipates an increase of Rs 1,288.50 crore in revenue expenditures.
Likewise, expenditures related to centrally-sponsored schemes have also risen by Rs 1,154.92 crore. This encompasses compensation for individuals displaced under the Pradhan Mantri Awas Yojana, MNREGA, AMRUT, among others. Furthermore, the current fiscal year estimates a deficit of Rs 615.16 crore in capital expenditures.
The rise in capital expenditure includes funds allocated for the purchase of e-buses and the state's contribution to the Chandigarh-Baddi railway line.
The continually growing pension burden has further exacerbated the financial crisis.
The FRBM estimates that Rs 10,800 crore will be allocated for pensions this fiscal year, which is Rs 838 crore more than the budget estimate of Rs 9,961 crore. Similarly, subsidy expenditures are also projected to rise by Rs 389.64 crore.
While financial experts had originally forecasted subsidy spending at Rs 6,358 crore, the FRBM now estimates this figure to be Rs 6,748 crore.
On a positive note for the government, the anticipated salary payments are lower than previously estimated. The budget initially forecasted Rs 14,533 crore for salaries, but the FRBM now estimates this at Rs 13,600 crore.
The report also anticipates an increase of Rs 186 crore in grant-in-aid expenditures, with Rs 3,400 crore planned against the budget estimate of Rs 3,213 crore.
The findings clearly indicate that expenditures are continuously rising while revenue receipts are not keeping pace, leading to an impending economic collapse.
