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CAG report highlights poor fiscal health of state

CAG report highlights poor fiscal health of state

Debt piling up: Chief Minister Jai Ram Thakur addresses the House in Dharamsala.

Lalit Mohan

Tribune News Service

Dharamsala, December 14

Chief Minister Jai Ram Thakur tabled the Comptroller General of India (CAG) report in the House today that painted a grim picture of the financial health of Himachal Pradesh.

According to the CAG report, the overall debt burden of the state has increased to Rs 51,030 crore in the last financial year, an increase of 8 per cent over last year. The fiscal liabilities of the state now stand at 37.55 per cent of the GDP and 1.86 times the total revenue receipts.

Deficit up

  • Debts rise to Rs51,030 cr

  • Fiscal deficit has increased to Rs3,870 cr

  • State has to repay loans to the tune of Rs20,874 cr with interest of Rs9,483 cr in next 10 years

In the next 10 years till 2028-29, the state will have to repay market loans of Rs 20,874 crore along with interest of Rs 9,483 crore.

The fiscal deficit (difference between revenue receipts and spending) of Himachal Pradesh swelled to Rs 3,870 crore during 2017-18 from Rs 2,948 crore during 2016-2017, an increase of 31.27 per cent (Rs 922 crore), the report reveals.

It points out that the state is on a fiscal correction path but it hasn’t yet amended the Fiscal Responsibility and Budget Management (FRBM) Act, as recommended by the 14th Finance Commission.

The revenue surplus of the state has consistently declined from Rs1,137 crore during 2015-16 to Rs 920 crore during 2016-17 and Rs 314 crore during 2017-18 despite heavy devolution of funds from the Union Government, says the report. The state had revenue deficit during 2013-14 and 2014-15. Thereafter, it maintained revenue surplus. However, in the last three years, revenue surplus declined consistently.

The report states that during 2017-18, revenue receipts increased by just 4 per cent to Rs 27,367 crore from Rs 26,264 crore the previous financial year. Only 35 per cent of the revenue receipts came from the state’s own resources (both tax and non-tax), while 65 per cent revenue came from the state’s share in Central taxes.

The report states that the Union Government is directly transferring funds to the tune of Rs 901 crore to the implementing agencies in spite of the decision to route it through the state budget.

It says that the total expenditure (Rs 31,312) of the state has decreased by 3 per cent (Rs 821 crore) during the previous financial year primarily on account of disbursement of loans to the tune of Rs 2,890.50 crore to discoms (distribution companies) under the UDAY Scheme during 2016-17.

The revenue expenditure increased by 7 per cent (Rs 1,709 crore) from Rs 25,344 crore during 2016-17 to Rs 27,053 crore during 2017-18 and its share in the total expenditure increased to 86 per cent from 79 per cent the previous year.

The report also points to delays in the submission of utilisation certificates for grants by various government departments.

A large number of autonomous bodies did not prepare their final accounts for a considerable period and as a result their financial position could not be assessed, the report adds.

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