Wrong recommendations by 13th FC created fiscal crisis in HP: CPI-M



Shimla (Feb 10): State Unit of CPI(M) has asked 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 (13thFC) recommendations.

Member, state secretariat, CPIM, Tikender Singh Panwar demanded this in a press statement issued here today mentioning that while the state government has asked for a loan of Rs 180 crore from the Centre to meet its expenditure, its total loan liability has surpassed Rs 23,000 crore.

The CPI(M) has stated that the 13th Finance Commission has been most blunt towards Himachal Pradesh. “Whereas the other states have got 126% more fiscal grant from the 13th FC in relation to 12th FC, 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.”

“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, “Assessing the finances of states is a challenging task… Keeping in mind this diversity, we have followed a ‘normative approach’…..”. This normative approach has robbed the state of over Rs 2307.70 crore. The 13th FC in comparison to the 12th FC has approved a grant of Rs 7,888 crores, which was Rs 10, 202 crore during the 12th FC.”

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