Himachal Pradesh’s financial health has worsened with the rise in liabilities by 46 per cent in the last four years, the Comptroller and Auditor General of India (CAG) said on Friday.
These liabilities stood at 2.08 times the revenue receipts now. It said the dependence on central transfers was 58 per cent.
The report tabled in the state Assembly here said the fiscal liabilities have increased from Rs 18,071 crore in 2006-07 to Rs 26,415 crore in the 2010-11.
“As recommended by the 12th finance commission, the state government was required to set up a consolidated sinking fund for amortisation of market borrowings as well as other loans and debt obligations but this was not set up,” the report said .
Since the state government has one of the highest ratio of government employees in the country it isn’t surprising that the CAG has blamed the worsening financial health to huge expenditure on salaries and wages.
The latest expenditure on salaries and wages was Rs 1,496 crore (33 per cent) and Rs 2,113 crore (55 per cent) more than the projection of Rs 4,455 crore made in the MTFPS.
The report points out that the government invested Rs 2,864 crore and raised high cost borrowings from the market in the last four years at an interest rate of 8.81 per cent while the return during the same period was 1.78 per cent.
The government received 2.28 per cent return of interest receipts as percentage to outstanding loans but paid eight per cent interest on borrowings.
The revenue deficit and fiscal deficit was 2.36 and 4.83 per cent of the GSDP during the year which was higher than projections .
