Himachal Pradesh runs the risk of getting entangled in a “debt trap by 2018-’19,” according to a Comptroller and Auditor General (CAG)report. The state, according to the report, borrowed more than Rs 38,000 crore from the market, which the audit claims is “excessive” and a “violation of the Constitution.”
The borrowed money is the highest in the state’s history and the CAG claims that the burden is not showing any signs of lessening. “Raising loans without the consent of the Government of India (GoI) beyond the ceiling limits resulted in violations. The net borrowing during the year, was Rs 4,307.79 crore against Rs 1,521.79 crore,” says the report.
Principal Accountant General (audit) Himachal Pradesh R M Johri said the government borrowed money at high rates to repay earlier loans. “It was not used for development. This is a matter of serious concern and the state could be in a debt trap soon,” he said. Shortfall in in revenue generation — tax and non-tax — high expenditures and no additional resource generations , and mounting debt has come under severe indictment from the CAG. There was also a delay in furnishing utilisation certificates to the tune of Rs 2,387 crore by end of March 2015.The CAG claimed that there was fiscal imbalance on all three parameters — revenue, fiscal and primary deficits.
“In 2005, the state government had enacted Fiscal Responsibility and Budget Management Act (FRBM). The revenue deficit was supposed to have been brought to zero during 2011-12 and maintain a revenue surplus, From revenue surplus situation in 2011-12, the state experienced a revenue deficit of Rs 576 crore, Rs 1,641 crore and Rs 1,944 crore during 2012-’13, 2013-’14 and 2014-’15, respectively,” said report. “The fiscal deficit was 4.39 percent of GSDP (Gross State Domestic Product) ,which is significantly above the target fixed by the FRBM Act” .
“The utilization of the borrowings to repay debt went from 36 per cent in 2011-’12 to 76 percent in 2014-15,” the CAG pointed out.
A few days ago, the state assembly approved a proposal to hike salaries and pensions of the MLAs by almost 100 per cent which will impose an additional burden of nearly Rs 15 crore per annum on the exchecquer. More than 40 chairmen and vice-chairmen appointed for boards and corporations cost an additional Rs 200 crore per annum, a finance official revealed.