Himachal Pradesh Budget: Hopes high, options limited, CM faces uphill task

KS Tomar

Chief Minister Jai Ram Thakur, who also holds the finance portfolio, has an unenviable task of presenting the Budget under the pandemic’s serious negative fallout on economy for the third year running. The CM will present the budgetary proposals for 2022-23 in the Assembly on March 4.

Covid has hit poor people, industry, the unemployed youth, employees and others who have high expectations from the Budget.

Challenges

Major challenges before the Chief Minister are huge debt liabilities, fiscal deficit, compulsion of announcing special packages to small and medium industries and creation of jobs

The grim national economy has prevented the Centre from offering any help to the hill state in the Union Budget earlier this month. Rising demands of the employee organisations for higher scales, regularisation of jobs, removal of pay anomalies, etc, has aggravated his problems in the election year as meeting them will need thousands of crores of rupees.

Major challenges before the Chief Minister are huge debt liabilities, fiscal deficit and compulsion of announcing special packages to small and medium industries, creation of jobs, addressing the sky-rocketing prices of essential commodities like petrol and diesel, besides enhancing the allocations in MGNREGA, health, education, etc.

The latest report of CAG has made a startling revelation that Himachal’s debt burden has mounted to Rs 62,212 crore in the financial year 2019-20 as compared to previous year i.e. Rs 53,147 crore. This needs to be addressed in the upcoming budget on urgent basis.

Himachal lacks capacity of resources mobilisation and has always depended on the Central assistance which is ruled out this time as the Union Finance Minister is saddled with massive problems that prevented her from announcing any new projects or any type of relief in Central divisible pool of taxes to the state.

The dilemma that Chief Minister Jai Ram Thakur faces flows from a compulsion to realize BJP’s dream of repeating electoral success in the state.

Experts are of the opinion that the CM’s urge to influence voters may lead to inclusion of lucrative schemes in the Budget. It will have a direct bearing on the capital expenditures and continuously accumulating fiscal deficit hence must be avoided.

Twin factors, checking fiscal deficit and debt liabilities, make it necessary to increase allocation in capital expenditures which was pegged at Rs 11,701 crore in 2021-22. It was a huge dip of 31.81 per cent as compared to 2020-21 (Rs 17,449) and 3 per cent down from previous year i.e. 2019-20 (Rs 12,333 crore).

The Chief Minister also faces big challenges of rising expectations of educated unemployed youths, loss of jobs due to closure of medium and small scale industrial units, lack of new opportunities in government departments and Centre’s failure to increase import duty on apples.

He will have to ensure enhancement in the allocation to MGNREGA and announce a special bailout package to industry and tourism to generate jobs besides according priority education, worst affected by Pandemic.

Pandemic had made survival of villagers and daily wage earners difficult. MGNREGA, launched in 2009 by UPA II Government, proved to be a boon during Covid-19 in the state.

In the final assessment, it may be too much to expect extraordinary innovations in the Budget though the Chief Minister might give top priority to political adventurism overlooking the need to imitate ‘union model Budget’. Winning elections could override all other logical considerations.

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