The Himachal Pradesh government, which is burdened with debt, has taken a new decision. Now, the salary of government employees and pension of retired employees will not come on the 1st of every month. From now on, the salary of government employees will come on the 5th and pension of retired employees will come on the 10th.
This is the first time in the history of Himachal that neither salary nor pension came on the 1st. The opposition was also aggressive about this. On Wednesday, the opposition also raised this issue in the assembly. On this, Chief Minister Sukhwinder Sukhu said that for now the salary will come on the 5th and pension on the 10th.
Chief Minister Sukhu has also claimed that by not paying salary and pension on the 1st, Rs 36 crore will be saved every year.
What is the math behind this?
There are about 2 lakh government employees and 1.5 lakh pensioners in Himachal. Every month Rs 1200 crore is spent on the salaries of employees and Rs 800 crore on the pension of retired employees. That is, in total every month Rs 2 thousand crore is spent only on salaries and pensions.
Chief Minister Sukhu said that the government has to take loans for salaries and pensions. Every month, interest of Rs 3 crore has to be paid on this loan. He said that if salaries and pensions are paid a little late, then Rs 36 crore can be saved annually.
CM Sukhu also said that this is only for some time and then salary and pension will come only on the first of the month.
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If she doesn’t take a loan then how will she pay the salary?
Now the question arises that if Himachal will not take loan to pay salaries and pensions, then how will it pay? Actually the money for this will come from the central government.
CM Sukhu said that the Revenue Deficit Grant (RDG) will come on the 6th of every month and the Centre’s tax share will come on the 10th. Himachal government receives Rs 520 crore as revenue deficit grant and Rs 740 crore as the Centre’s tax share every month.
But why money from the Centre?
Revenue Deficit Grant (RDG) is given by the Central Government to reduce the revenue deficit of the state governments. Its provision has been made in Article 275 of the Constitution.
How much grant will the states get from the central government? This is decided by the Finance Commission. Currently, the grants that the states get are given on the basis of the recommendations of the 15th Finance Commission. The 15th Finance Commission has recommended grants from 2021-22 to 2025-26. The Finance Commission assesses the revenue and expenditure of the states and announces grants accordingly.
Similarly, the states are also given a share in the tax that the central government receives. Earlier, the states used to get 32% share in the central tax revenue. The 15th Finance Commission increased this share to 41%. The share of each state was decided by the Finance Commission. For example, the share of Himachal government in the central tax revenue is 0.83%. Uttar Pradesh government has the highest share of 17.93% and then Bihar government has 10.05%.
How much money do governments get?
In the budget for 2024-25, the central government has kept Rs 12.47 lakh crore to give the share of tax revenue to the states. Rs 11.04 lakh crore was kept in the budget for 2023-24. In 2024-25, the Himachal government will get Rs 10,352 crore from the Center as its share of tax.
On the other hand, based on the recommendation of the 15th Finance Commission, states will get about three lakh crore rupees as revenue deficit grant between 2021 and 2026. However, not all state governments get this grant. 11 state governments including Uttar Pradesh, Madhya Pradesh, Gujarat, Chhattisgarh and Jharkhand do not get this grant.
Based on the recommendation of the 15th Finance Commission, the Himachal government will get a grant of Rs 37,199 crore between 2021 and 2026. The Himachal government has received a grant of Rs 10,249 crore in 2021-22, Rs 9,377 crore in 2022-23 and Rs 8,058 crore in 2023-24. However, based on the recommendation of the Finance Commission, the Himachal government received a total grant of Rs 9,115 crore in 2023-24.
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But will anything come out of all this?
The debt on the Himachal government is continuously increasing. According to the Reserve Bank report, Himachal had a debt of Rs 69 thousand crores till March 2022. By March 2024, this debt increased to Rs 86,600 crores. By March 2025, the debt on the Himachal government will increase further to about Rs 95 thousand crores.
40 percent of the Himachal government’s budget is spent on paying salaries and pensions. About 20 percent is spent on paying off loans and interest.
One of the reasons for the increase in debt is also believed to be the freebies being distributed by the Congress government. Apart from this, after coming to power, the Congress also implemented the Old Pension Scheme, which further increased the expenditure. Understand it like this that in 2021-22, the Himachal government spent Rs 6,399 crore on pension. Whereas, in 2022-23, more than Rs 9 thousand crore has been spent on pension. At the same time, the Himachal government spent about Rs 12,800 crore on salary in 2021-22. This expenditure increased to more than Rs 16 thousand crore in 2022-23.
Himachal government got another shock when the central government reduced the limit of borrowing. Earlier, Himachal government could borrow up to 5 percent of its GDP. But now it can borrow only up to 3.5 percent. That is, earlier the state government could borrow up to Rs 14,500 crore, but now it can borrow only Rs 9,000 crore.
To reduce this burden of debt, last week CM Sukhu had said that the Chief Minister, Ministers and Parliamentary Secretaries will not take salary for the next two months. By not taking salary for two months, about Rs 85 lakh will be saved.
Overall, the Himachal government is trying to save every penny to reduce the debt burden.
Source (PTI) (NDTV) (HINDUSTANTIMES)