HP's outstanding debt-GSDP ratio much above the target set by 15th FC: CAG

The Comptroller and Auditor General (CAG) of India in its report, said the total outstanding debt-GSDP ratio, which stood at 42.91%, was above the target set by the 15th Finance Commission (36%).

Himachal Pradesh's outstanding debt-Gross State Domestic Product (GSDP) ratio is much above the target set by the 15th Finance Commission (FC), according to a CAG report.

The Comptroller and Auditor General (CAG) of India in its report, tabled by Chief Minister Jai Ram Thakur in the Assembly on Saturday, said the total outstanding debt-GSDP ratio, which stood at 42.91 per cent, was above the target set by the 15th Finance Commission (36 per cent).

The CAG report for the year ended March 31, 2021, further stated that the state government passed the Himachal Pradesh Fiscal Responsibility and Budget Management (HP-FRBM) Act in April 2005 and provided for quantitative targets to be adhered to by the state with regard to deficit measures and debt levels.

 

The HP-FRBM Act was required to be amended to prescribe revised targets for deficit and debt levels. However, the same had not been done by the state government, it added.

Against the target of maintaining the revenue surplus prescribed by the 15th Finance Commission (FC) and in HP-FRBM Act, there was revenue deficit (Rs 97 crore) during 2020-21. Actual Fiscal Deficit at 3.64 per cent of GSDP remained within the 15th FC target, but exceeded the targets set in the FRBM Act, it added.

During the year 2020-21, there was a revenue deficit of Rs 97 crore, as against the previous year's revenue surplus of Rs 12 crore. The fiscal deficit (Rs 5,700 crore) increased by Rs 2,103 crore over the previous year ( Rs 3,597 crore). Primary deficit decreased to Rs 21,228 crore during 2020-21 from Rs 1,363 crore in 2019-20, it added.

During the year 2020-21, there was an increase of 8.77 per cent ( Rs 2,695.86 crore) in Revenue Receipts over the previous year but only 31 per cent of the Revenue Receipts came from the state's own resources comprising taxes and non-taxes, while the remaining 69 per cent were contributed by central transfers comprising the state's share in central taxes and duties (14 per cent) and Grants-in-Aid from Government of India (55 per cent), it added.

Total expenditure increased by Rs 7,031.31 crore (21.88 per cent) over a period of five years (2016-21). During 2020-21, total expenditure (Rs 39,164.25 crore) of the state increased by Rs 2,801.70 crore (7.70 per cent) over the year 2019-20. Share of revenue expenditure in total expenditure ranged from 78.9 per cent to 86.7 per cent during the period 2016-21, it added.

Rate of growth of revenue expenditure displayed a fluctuating trend over the same period. The committed expenditure accounted for a dominant share (67-71 per cent) of revenue expenditure and revenue receipts (65-70 per cent) of the State during the five-year period 2016-21, it added.

During 2020-21. capital expenditure (Rs 5,309 crore) increased by Rs 136 crore (2.62 per cent) over the previous year 2019-20 (Rs 5,174 crore), and constituted 13.56 per cent of total expenditure as compared to 14.23 per cent during 2019-20, it added.

The overall fiscal liabilities at the end of the year were Rs 67,164.75 crore, after excluding Rs 1,717 crore received as back-to-back loans to State from Gol in lieu of GST compensation shortfall, it added.

These had increased by 7.96 per cent in 2020-21 as compared with 14.57 per cent in the previous year. The ratio of fiscal liabilities to GSDP in 2020-21 was 42.91 per cent (calculated by excluding Rs 1,717 crore received as back-to-back loans), it added.