Himachal CM Sukhu’s poll promises run into fiscal barrier

Himachal Pradesh Chief Minister Sukhwinder Singh Sukhu says he is more for ‘Vyavastha Parivartan’ but his government seems to be treading a tough path to deliver on 10 guarantees that the Congress had assured the people during the election campaign.

The Chief Minister’s Vyavastha Parivartan means making radical changes in the system of governance and cutting down bureaucratic delays for a time-bound delivery of public services.

But he admits that the state’s financial health could be the biggest roadblock to meet expenditure required to fulfil the election promises.

In the election, the Congress said the “Old Pension Scheme” (OPS) would be implemented within 10 days of forming the government while all women in the age group of 18 to 60 years would start getting Rs 1500 per month immediately.

Though, the cabinet has decided to reinstate the OPS on January 13—a month after formation of the government but modalities and rules on its implementation are still to be worked-out. This will involve an expenditure of Rs 800 to 900 crore for which there is no money so the government is planning to raise Rs 1,500 crore loans.

“The centre has declined to return Rs 8,000 crore deposited as employee’s contributions in the National Pension Scheme (NPS). The cabinet has decided to restore OPS. I knew that the state’s financial affordability is a factor. So, funds have to be arranged to implement OPS for 1.36 lakh employees as we feel it is a commitment of the Congress and a matter of social security,” says Sukhu.

The employees have got nothing in their hands so far while their monthly contributions towards NPS for the month of January 2023 stand already deducted from their salaries.

The challenge emerging before the Chief Minister is to strike a balance between lofty promises and keep pace with growth and infrastructure development in the state with meagre resources.

Sukhu admits that the state was passing through dire financial straits due to a high debt liability which stands at a whopping Rs 75,000 crore.

“There is a debt burden of Rs 75,000 crore. We inherited another liability of Rs 11,000 crores as payments to the employees. This includes the arrears of revised pay worth Rs 4,430 crore and a pensioners’ liability to the tune of Rs 5,226 crore. There was another Rs 1000 crore payable as unpaid arrears of DA of sixth Pay Commission implementation,” he says .

Sukhu talks of taking hard decisions. “If some tough decisions are not taken, the conditions will be almost similar to Sri Lanka” Sukhu told a a public gathering at his home town– Nadaun in Hamirpur district last week.

He says it will take him at least four years to bring the state’s fiscal health back on the rails.

The opposition BJP has decided to start a signature campaign against the government to mobilise public opinion. The BJP’s strategy is to put the Congress on its back foot and set the tone for the 2024 Lok Sabha polls.

The BJP had won all four seats in the 2014 and 2019 election due to the Modi factor. But, later suffered a blow at Mandi during the 2021 bypoll. It lost the seat to Pratibha Singh, former Chief Minister Virbhadra Singh’s wife.

Though having lost power in the state, the party is rolling back its sleeves to undo the loss it suffered in the state assembly polls due to anti-incumbency and the Congress wooing government employees with the OPS promise. The Lok Sabha poll will be fought on different issues and Prime Minister Narendra Modi will be a factor, not local issues as had happened in the 2022 byelection.

Secondly, says Jai Ram Thakur, former Chief Minister “the margin of defeat between the BJP and Congress in terms of the votes polled is just 0.9%. This is the first government in the history of Himachal Pradesh, which has won with such a small margin though numerically the Congress gained in the seats but the BJP is holding on its core vote share”

 At BJP‘s state executive meeting, held this month, Thakur launched a sharp attack against the government for passing the buck on the state’s debt on the BJP and going for fresh loans. Why has the Congress resorted to borrowings of Rs 1500 crore within the past 60 days, not for funding any development project but its own expenses.

The implementation of OPS alone will cost Rs 800 crore while liability on fulfilling second promise to give Rs 1500 per month to women will further need additional resources of Rs 1,895 crore .There are more than 10.53 lakh women, who will be eligible for the benefits. An exercise is also underway to give 300 units of free power to consumers in the state as promised by the party.

Ever since this Congress government was formed in Himachal Pradesh, it has taken a loan of Rs 1,000 crores within 15 days, after that it took another loan of Rs 1,500 crores in the month of January and now this government is going to take another loan of Rs 1,500 crores in February 2023 also.

If the Congress fulfils the ’10 guarantees’ it made to the people before elections, there will be hardly any money left for development or have to raise more loans even to pay salaries to the government employees. The promise for five lakh jobs is going to be the biggest test in the coming months, says Jai Ram Thakur.

In January 2022, the government had imposed 3 percent GST on diesel. The water tariff in Shimla has been revised and there is a move to impose green tax on tourist vehicles entering Shimla town. The government is also mulling to levy cess on water utilised by hydro-power companies to raise resources for implementing election promises.

Right now, the Congress government is also under attack over closure of 900 institutions opened during the previous regime. These include hospitals, educational institutions and veterinary centres and dozens of administrative offices of the Public Works Department and Jal Shakti.