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Thursday 17 August 2017
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CPI (M) challenges government for all party meeting, accuses for the fiscal crisis

The Himachal Pradesh CPI (M) state secretariat Tikender Singh Panwar asks the chief minister to hold an all party meeting on the fiscal situation in the state particularly after the fallout of the 13th Finance Commission recommendations. It is pertinent here to mention that the state government has asked for a loan of Rs 180 crores from the centre to meet up is expenditure, already the total loan has surpassed Rs 23000 crores.

The CPI (M) has the stated; the 13th Finance Commission has been most blunt towards Himachal Pradesh. Where as the other states have got 126% more fiscal grant from the 13th FC in relation to 12th FC, the state of Himachal has got just 50% more. The reasons being (a) incorrect ‘normative approach’ of the 13th FC has thrown the state into a limbo and (b) severe conditions imposed by the 13th FC will hunt the state and the people for long.

(a)As far as the incorrect estimation of the 13th FC is concerned, its report itself speaks about the “normative approach” methodology. In Chapter 7 of the 13th FC under (A) Assessment of ‘revenue and Expenditure’ it states, quote, “Assessing the finances of states is a challenging task… Keeping in mind this diversity, we have followed a ‘normative approach’…..” Unquote.

This normative approach has robbed the state with over Rs 2307.70 crores. The 13th FC in comparison to the 12th FC has approved a grant of Rs 7,888 crores, which was Rs 10, 202 crores during the 12th FC. The 13th FC has dismally lowly estimated the non plan expenditure i.e. salary, pensions, interests liabilities etc because of which our central revenue loss deficit grant has been curtailed. This has happened because of the wrong estimations of the 13th FC. The loss for 2010-11 has been Rs 2307.79 crores.
(b) As far as the severe conditionalities are concerned , the CPIM has stated, is due to the neo liberal outlook of the government and the 13th FC. According to the 13th FC report page 98 it categorically states, quote “ FC-XIII had recommended that states, should follow a recruitment policy such that salary expenditure does not exceed 35% of revenue expenditure net of the interest payments and pensions…. ”Unquote. This will have a cascading and sequential effect in the state. Already the revenue expenditure on this component i.e. salary, pensions interest etc is 56% in 2010-11. This condition is far from reality in the hilly state where this sector has developed in large proportions.
Further, the CPIM has stated, the condition to reduce the fiscal deficit to 3.5% in 2010-11 and 3% subsequently for 2011-15 will severely cut the plan expenditure of the state thereby harshly affecting developmental schemes howsoever little they may be.
Finally even the ration quota for the state has been drastically cut despite the fact that the state is a food grain deficit state and has to import both rice and wheat in large quantities to meet up its demand.

The CPIM has stated, this is a real crisis in the offing in which the state would be badly engulfed. Through the all party meeting a vociferous voice needs to be generated to ensure that the state gets its due of a special category status and should not be penalized just because it has only 4 MPs in Lok Sabha and is a peaceful state.



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