Himachal Pradesh: Coffers dry, govt to borrow Rs 700 crore to pay March salaries, pensions

The Rs 35,783 crore budget Chief Minister Virbhadra Singh presented in the state Assembly is slated to be passed on March 30.

With its coffers running empty at the end of the current 2016-17 financial year, the state government has decided to borrow Rs 700 crore from the RBI on March 28 to pay this month’s salaries.

Sources said the government has no money to pay this month’s salaries, disburse pensions and clear arrears and other liabilities, including medical bills, besides interest repayments for its existing loans exceeding Rs 50,000 crore.

The Rs 35,783 crore budget Chief Minister Virbhadra Singh presented in the state Assembly is slated to be passed on March 30. Additional Chief secretary (Finance) Srikant Baldi said, “We are going to raise a loan of Rs 700 crore on March 28 from RBI. The money is urgently needed to meet our liabilities and some expenditure on the development side.”

In the current financial year, the state government has already raised Rs 2,400 crore in loans, including Rs 700 crore raised on March 14, after the Chief Minister presented the budget in the House. Finance department officials say though it was done after obtaining necessary approvals from RBI and GoI, its long-term impact on the state’s fiscal health could be devastating.

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