Moving away from indulging in and perpetuating irrational, competitive and political populism, the Congress government in Himachal Pradesh appears to be finding a judicious road map by rationalising subsidies-freebies for reviving the State’s financially stressed economy.
To improve the revenues of the hill State, his government was rationalising the subsidies being given to more affluent sections of society, Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu said on Sunday (September 1).
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“We are working towards fiscal prudence, and rationalising various subsidies is one among them. Several decisions have been taken and others are in the pipeline to manage the government’s finances to maintain fiscal stability, sustainability and discipline. The decisions will be implemented in a phased manner,” Mr. Sukhu said.
“Tariff rates of water and electricity are being rationalised to benefit the people of the State. For example, we have stopped the electricity subsidy of ₹1 per unit to hotels and big commercial establishments. Also, we have decided that, in rural areas, domestic consumers with annual income above ₹50,000 will pay ₹100 per month as a water bill. The weaker sections will get it (water) free of cost though. Just before the Assembly elections, the previous Bharatiya Janata Party (BJP) government brought the policy that waived water bills in rural areas. Why should those who can pay electricity and water bills be given electricity free? We have also imposed water cess on power projects constructed in the State though the matter is stalled due to legal tangles,” Mr. Sukhu told The Hindu over the phone.
As the Himachal Pradesh government’s debt liability has reached nearly ₹90,000 crore, the BJP, the main Opposition in the State, has been targeting the ruling Congress over alleged financial mismanagement. The State’s total debt ballooned from ₹47,906 crore in 2018 to ₹76,651 crore in 2023.
Mr. Sukhu said the adverse financial situation his government inherited from the previous BJP government was known to everyone, and that his government was taking systematic steps to overcome the challenges that had arisen from the financial mismanagement and spree of wasteful expenditure practised by the previous BJP government.
Mr. Sukhu said his government had taken several austerity measures. “We recently decided to defer the salaries of the Chief Minister, Ministers, Chief Parliamentary Secretaries, Chairmen and Vice Chairmen of various Boards and Corporations for two months. The symbolic decision shows the government’s commitment to bringing the State’s economy back on track,” he said.
He said after coming to power, the Congress government had adopted an open tender policy for auctioning retail liquor vends in the State, which had helped earn handsome revenues for the State exchequer. “The previous BJP government did not follow the auction-cum-tender process during their tenure. They only used to renew the licenses, which caused losses worth hundreds of crores to the State. We started the auctioning of retail vends and in one year (2023-24) itself the State exchequer has earned ₹485.18 crore, whereas the previous BJP government earned ₹665.42 crore revenue during its entire tenure of five years,” Mr. Sukhu said.
The Chief Minister alleged the previous BJP government had not presented the State’s case strongly before the 15th Finance Commission. “Due to the BJP’s laxity, the revenue deficit grant, which was ₹8,058 crore in the year 2023-24, has been reduced to ₹6,258 crore in the current financial year. In the next financial year, it will be decreased to ₹3,257 crore. The State has also not received ₹9,042 crore as financial assistance following a post-disaster assessment by the Central government. Also, the BJP-led Union government has imposed restrictions on Himachal Pradesh for its decision to implement the Old Pension Scheme. As a result, the limit for taking loans in this fiscal has been fixed at ₹6,600 crore. Apart from this, a limit of taking a total loan of ₹2,900 crore in three years has been set for externally aided projects, whereas earlier there was no limit for this,” Mr. Sukhu said.
