Himachal’s severe financial crisis to delay MLA funds, pay hike and allowances: CM

Chief Minister Sukhvinder Singh Sukhu Monday said that Himachal Pradesh is passing through a severe financial crisis, so much so that the government is currently unable to release the third instalment of the MLA Area Development Fund.

Responding to a Point of Order raised by Leader of Opposition Jai Ram Thakur after Question Hour in the assembly, the Chief Minister said the financial condition of the state continues to be severe. He said the MLA Area Development Fund is the privilege of every legislator, but the government is facing difficulty in releasing the next instalment due to limited financial resources.

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Sukhu said he fully understands the problems being faced by MLAs. However, given the strained fiscal situation, the government may not be able to pay the enhanced salaries and allowances to legislators this month as well, he added.
The Chief Minister pointed out that the Himachal Pradesh Assembly is the only assembly in the country where MLAs pay their own income tax as well as electricity and water bills.

He added that only if the Centre provides financial support will the government be able to release the third instalment of the Area Development Fund this month.

Sukhu said the state’s Revenue Deficit Grant (RDG) has come down from Rs 11,000 crore to Rs 3,200 crore. After the restoration of the Old Pension Scheme (OPS), the Centre also withdrew the state’s annual additional borrowing limit of Rs 1,600 crore.

In the current circumstances, the government has stopped all non-essential expenditure to ensure timely salaries, pensions and continuation of development works, he informed.

The Chief Minister said he has raised the issue of reduced tax devolution and grants with Union Finance Minister Nirmala Sitharaman, who, in turn, questioned the state’s decision to revive OPS when it is being discontinued across the country. Sukhu said he has already demanded a two per cent increase in the state’s borrowing limit and will reiterate this demand in another meeting in January.

He also said that although he has presented the state’s financial condition before the 16th Finance Commission, the state should not expect major relief, considering the rise in per capita income.

Earlier, raising the issue, Leader of Opposition Jai Ram Thakur said the government has released only two instalments of the MLA Area Development Fund for the current year and that even sanctioned amounts are not being released as per MLAs’ recommendations.

He said in his Seraj constituency, projects worth Rs 71.96 lakh have been approved, but only Rs 24.50 lakh has been released so far. This, he said, is leading to public distrust and criticism of MLAs. BJP legislators had also staged a protest in the Assembly complex demanding the release of the third instalment.