Virbhadra to meet Montek on Nov 20

State Chief Minister Virbhadra Singh has said his government will lay emphasis on long-term measures for the fiscal health of the states, when he meets the Planning Commission Vice-Chairman Montek Singh Ahluwalia, on November 20.

"All the states, including the big ones, are in bad shape economically, and bailing them out with short-term measures like grants is no solution. Instead, a more pragmatic and practical approach is needed," Singh said.

Currently, Singh holds the finance portfolio too.

He said he had been asked to meet Ahluwalia by Sonia Gandhi, after her recent visit to Shimla.

Virbhadra requested Gandhi to bail the state government out of the severe debt crisis.

"We have inherited a loan liability of Rs 15,000 crore, on which just the interest liability is about Rs 2,000 core each year. This is after we have done loan swapping, by taking loans at lower rates of interest and paying off the earlier ones taken at exorbitant rates of interest," he said.

"The Planning Commission should set up a National Pay Commission, which should decide on the salaries of all government employees," Virbhadra said.

He said the salaries hiked for the central government employees had a cascading effect on states' finances, because state government also had to set up similar pay commissions for their employees.

He said the National Pay Commission should take the paying capacity of the special category states before deciding on the salaries of the government employees. If need be, the Centre should meet the difference.

"Himachal Pradesh has over 90 per cent of its population living in villages, comprising small and marginal farmers. So there is little scope for imposing taxes," he said.

"Besides, states like Himachal were backward in industry and other sectors, which further reduced the scope for increasing revenue," he said.