March 18, 2021 10:37:23 pm
The Himachal Pradesh Assembly Thursday passed a Bill to amend the HP Fiscal Responsibility and Budget Management Act, 2005 to regularise excess borrowings by the state government in the year 2019-20.
“Under the FRBM Act, the state’s fiscal deficit cannot exceed three per cent of the gross state domestic product (GSDP) in a financial year. If it does, the anomaly has to be regularised by the state legislature for that particular year,” said urban development Suresh Bhardwaj.
Opposition Congress, meanwhile, alleged that the Bill allowed the state government to exceed the three per cent fiscal deficit limit for the future as well. Opposition leader Mukesh Agnihotri said that it would nearly double the state government’s capacity for taking loans, eventually leading to a debt trap. All the Congress MLAs walked out of the Assembly in protest.
Bhardwaj, however, said that the Bill was a one-time relaxation for the year 2019-20, as during that year, the state’s fiscal deficit had exceeded three per cent due to additional borrowings. “That year, there was lower devolution of central taxes and the state received Rs 1,600 crore under the Compensatory Afforestation Fund Management and Planning Authority (CAMPA) which is included in the public debt. So the total borrowings had exceeded the limit. The three-per cent limit stays as it is for the coming years,” he said.
He alleged that this limit had also been exceeded during the Congress government in 2012-13, 2013-14, and 2014-15, but the FRBM Act had not been amended back then.
Theog MLA Rakesh Singha, the lone CPI(M) MLA, also walked out saying that since the state had failed to receive its full share of taxes from the Centre in 2019-20, the additional borrowings also must have been made by the Centre rather than the state. The majority party then passed the bill with a voice vote.
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