Himachal Economy Under Stress, Says Fiscal Responsibility And Budget Management Report

(MENAFN- IANS) Dharamsala, Dec 21 (IANS) Himachal Pradesh's economy, which largely banks on horticulture, tourism and hydropower, is under stress with the increasing revenue, fiscal deficit and increase in expenditure on pension and subsidies, said the Fiscal Responsibility and Budget Management (FRBM) report.

The report laid by Chief Minister Sukhvinder Singh Sukhu on the last day of the legislative Assembly here said“there is a need to make Herculean efforts to relieve the Economy from the pressure due to reduction of Rs 1,800 crore in the revenue deficit grant in the current fiscal as compared to the previous one”.

According to the report, the revenue deficit till December is estimated to be Rs 1,493.25 crore, which is more than the budget estimates. The reason for the increase in revenue deficit is the higher expenditure on salaries, pensions and subsidies. The revenue deficit is estimated to increase to Rs 6,006.86 crore with an increase of Rs 1,493 crore in the FRBM.

Similarly, the fiscal deficit is estimated to reach Rs 6,836.64 crore with an increase of Rs 2,308.11 crore.

Experts told IANS the FRBM report comes in the wake of the Congress government in the state delaying salaries of employees and mulling to rollback doles and freebies announced during the Assembly polls.

The report says along with the increasing expenses, the estimate of revenue receipts in the state has also gone imbalance, especially about levying water cess that is pending in courts due to which Rs 1,000 crore“hangs in balance”.

Similarly, in the current fiscal, the revenue deficit grant has also decreased by Rs 1,800 crore as compared to the last fiscal.

Due to non-receipt of this amount from the Centre, the revenue deficit is increasing. In the current financial year, an increase of Rs 1,288.50 crore is estimated in revenue expenditure.

Likewise, the amount to be spent on centrally-sponsored schemes has also increased by Rs 1,154.92 crore. This includes the amount of compensation given to the displaced people of the Pradhan Mantri Awas Yojana, MNREGA, AMRUT, etc. Similarly, a deficit of Rs 615.16 crore is also estimated in capital expenditure in the current fiscal.

The increase in capital expenditure includes the amount spent on the purchase of e-buses, the state's share in the Chandigarh-Baddi railway line, etc.

The ever-increasing pension bill has further spiked the financial crisis.

According to the FRBM, Rs 10,800 crore will be spent on pension in this fiscal. This is Rs 838 crore more than the budget estimates of Rs 9,961 crore. Similarly, the expenditure on subsidies will also increase by Rs 389.64 crore.

While presenting the budget, financial experts had estimated the expenditure on subsidies to be Rs 6,358 crore, but according to the FRBM Rs 6,748 crore will be spent on this.

However, the relief for the government is the amount to be spent on payment of salaries. In the budget estimates, Rs 14,533 crore was estimated to be spent on salaries, but in the estimates of FRBM Rs 13,600 crore will be spent on salaries.

The report estimates an increase of Rs 186 crore in the expenditure on grants-in-aid. It said Rs 3,400 crore will be spent on grants-in-aid against Rs 3,213 crore in the budget estimates.

From the report it's evident the expenditure is constantly increasing and the economy has started collapsing as the revenue receipts are not increasing in proportion to the expenditure.

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