The members of the Himachal Pradesh Congress and the Communist Party of India (Marxist) on Thursday staged a walkout from the state Assembly on the state’s proposed amendments in Fiscal Responsibility and Budget Management (FRBM) Act to increase the limit of borrowing from existing 3 per cent to meet the deficit in Central shares in taxes to the state.
Initiating debate on amendments in FRBM Act that was moved by HP Parliamentary Affairs Minister Suresh Bhardwaj on behalf of Chief Minister Jai Ram Thakur, Theog MLA Rakesh Singha said there will be serious implications of the bill on state.
“The amendments are an attack on federal structure in current form as the law is being passed at Centre’s behest which had failed in giving actual receipts in Central taxes to the state in 2019-20.
The step will result in Himachal falling into debt trap and continue to do so in future with the government facing an increase in interest liabilities.
The state government is passing the bill in hurry on the directions of the Central government and instead of passing the bill, the ruling party should request the Central government to take onus of borrowing and interest liabilities,” he added.
The Leader of the Opposition, Mukesh Agnihotri, termed the bill as “black day” in the history of Himachal when the state is celebrating 50 years of statehood and said the state government was aiming to increase the limit to double with new amendments.
He urged the ruling party to take back the legislation and said the ruling party was running the government without any policy or vision.
State Parliamentary Affairs Minister Suresh Bhardwaj while replying to opposition members’ charge, said the government had brought the amendment for one time dispensation for the year 2019- 20 wherein credit limit of 3 per cent was exceeded.
“The FRBM Act enacted in the year 2005 was being amended as actual receipts of Central taxes declined during 2019-20 due to which share of states also got affected.
This led to the Centre government giving states one time special dispensation for additional borrowing to compensate the states for lower devolution of Central taxes on 26 February 2020 subject to amendment in the FRBM Act.
The legislation will regularise the expenditure and also the debts taken above the prescribed limit in FRBM during Congress regime in 2012- 13, 2013-14 and 2014-15,” he said.
He further stated that the previous Congress breached the FRBM Act and in addition, they didn’t admit to the breach and did not even try to regularise it which was mandatory to avoid future complications. Bhardwaj said Himachal had received one time receipts from the Union government on account of its share of Compensatory Afforestation Fund Management and Planning Authority (CAMPA) Fund credited in the Public Account which was included in the public debt of the state.
”To enable the state government to avail additional borrowing in public interest and to maintain the pace of development, the fiscal deficit could not be maintained at the level of 3 per cent of the estimated Gross State Domestic Product in the financial year 2019-20.
The bill has become necessary to amend the Himachal Pradesh FRBM Act 2005 suitably from lst January, 2020,” he added.
The opposition members including CPI (M) MLA Rakesh Singha were not satisfied with Bhardwaj’s reply and staged walkout from the Assembly and the amendments were passed in their absence in the House.