Shimla: The Himachal Pradesh Government has come under scrutiny as the Comptroller and Auditor General (CAG) highlighted fiscal mismanagement in its State Finances Audit report for 2021-22. The report revealed that the state government had indulged in excess expenditure of Rs 8,818 crore, which was not regularised by the legislature, during the past six years.
The government’s poor fiscal management and rising debt of over Rs 75,400 crore have raised concerns about the state’s financial stability. In this article, we will delve deeper into the details of the CAG report and examine the implications of the state’s financial situation.
The report was tabled in the Vidhan Sabha by Chief Minister Sukhvinder Singh Sukhu on Tuesday.
Rising Debt and Limited Resource Generation
The CAG report highlights the state’s rising debt, which has exceeded Rs 75,400 crore, and limited avenues for resource generation. The overall liabilities of the state rose by Rs 18,092.07 crore from Rs 51,030.51 crore in 2017-18 to Rs 69,122.58 crore by March 31, 2022. While 10 per cent of it or Rs 6,952 crore is to be paid in the next one year, 40 per cent (Rs 27,677 crore) is due in the next two to five years and the remaining 50 per cent (Rs 34,001 crore) is to be paid after five years.
Excess Expenditure and Poor Fiscal Management
The CAG report also highlighted the government’s expenditure of Rs 1,782.17 crore made in excess of the authorisation by the state legislature during 2021-22. This excess expenditure is required to be regularised by the legislature along with an excess expenditure of Rs 8,818.47 crore pertaining to 2014-15 to 2020-2021.
The report further stated that the government failed to contain the debt-GSDP (Gross State Domestic Product) ratio within the target set by the 15th Finance Commission, indicating poor fiscal management. However, the revenue deficit-GSDP ratio and fiscal deficit-GSDP ratio remained within the set limit. The Himachal Pradesh Fiscal Responsibility and Budget Management (HP-FRBM) Act, passed in 2015, has not been amended to meet the revised targets for deficit and debt levels. Additionally, the government has not fully implemented the notified Indian Government Accounting Standards in the state.
The CAG report has raised concerns about the Himachal Pradesh Government’s fiscal management, which has led to excess expenditure and rising debt. The state government must take necessary steps to address the issues highlighted in the report to ensure financial stability and avoid further deterioration of the state’s finances.
