Govt to raise Rs 500-cr loan for Diwali gift to employees

SHIMLA: The cash-strapped state government will raise a loan of Rs 500 crore to meet its liabilities towards serving and retired employees. The nod for raising the loan has been sought by the state government from the Centre. With this, the total loan raised by the Jai Ram-led BJP government will touch Rs 2,000 crore.

Pratibha Chauhan

Tribune News Service

Shimla, October 20

The cash-strapped state government will raise a loan of Rs 500 crore to meet its liabilities towards serving and retired employees.

The nod for raising the loan has been sought by the state government from the Centre. With this, the total loan raised by the Jai Ram-led BJP government will touch Rs 2,000 crore.

The loan will be repayable over a period of 10 years. The money is expected to be transferred to the government within two days.

Even though meeting development needs have been cited as the reason for raising the loan, sources said the main reason for seeking additional money was to disburse dearness allowance (DA) to employees before Diwali. However, it was not certain whether the DA would be given only to the employees or retirees would also get this benefit.

A decision on the grant of the remaining DA is expected to be taken by the Cabinet, which will hold its meeting on October 22.

This will be the third instalment of loan raised by the Himachal Government this year. Prior to this, two loan instalments of Rs 800 crore and Rs 700 crore had been taken this year.

The state government is yet to implement the Sixth Pay Commission and the DA to be given to the employees will be on the unrevised scale.

According to the unrevised scale, 6 per cent DA is yet to be given to the employees. However, it is uncertain whether the entire 6 per cent will be given around Diwali or only half the due amount will be given.

Even after raising the loan, the government still has a limit of raising Rs 4,500 crore this financial year.

The debt on the state has crossed Rs 48,000 crore. With limited sources of revenue generation, the state is largely dependent on the Centre for implementing its schemes and funding most development projects. A major part of the revenue comes from the state’s share in taxes.

Notwithstanding, the poor financial health of the state, the government seems to have made up its mind to release DA to its employees and pensioners.

6 pc allowance yet to be given

According to the unrevised scale, 6 pc DA is yet to be given
It is uncertain whether the 6 pc will be given around Diwali or only half the due amount will be given
The govt still has a limit of raising Rs 4,500 cr this financial year
It is not certain whether the DA will be given only to serving employees or retirees