A State on the move


    A committed State government has helped Himachal Pradesh achieve all-round development.

    Read an article written By: PURNIMA S. TRIPATHI in Frontline (Volume 23 – Issue 02, Jan. 28 – Feb. 10, 2006).

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    1. Reality is this:

      CAG pulls up HP Govt
      Failure to achieve target set by 11th Finance Commission
      Rakesh Lohumi
      Tribune News Service

      Shimla, April 7
      The Comptroller and Auditor-General of India (CAG) has pulled up the
      Himachal Pradesh Government for its failure to achieve the targets set
      by the 11th Finance Commission (EFC) under the fiscal reform programme
      for the 2000-01 to 2004-05 period, which further worsened the financial
      position of the debt-stressed state. It has warned that the
      ever-increasing ratio of fiscal liabilities to the GSDP (gross state
      domestic product) together with a large revenue deficit could lead the
      state into a debt trap.

      The latest report of the CAG presented in the House today revealed that
      the fiscal liabilities almost doubled from Rs 8,621 crore in 2000-01 to
      Rs 16,533 in 2004-05 and the annual interest liability shot up from Rs
      597 crore to Rs 1,641 crore over the period.

      The average growth rate of interest payment came to 21.08 per cent. In
      addition, the state had given guarantees, which stood at Rs 4,751
      crore. The government could not maintain the minimum cash balance with
      the Reserve Bank of India and obtained ways and means advances of Rs
      1,579 crore on 93 days and overdraft of Rs 320 crore on 27 days.

      The government failed to meet the milestones set by the EFC for
      bringing about financial discipline as a result of which it could not
      avail revenue deficit grant to the tune of Rs 414.23 crore. The revenue
      receipts increased from Rs 4,634 crore from Rs 3,175 crore and the
      percentage of interest payments to revenue receipts worked out to 35.40
      per cent as against the target of 18 to 20 per cent. The increase in
      interest payment was 175 per cent over the period as compared to the
      overall recommended limit of 50 per cent for the five-year period
      ending on March, 2005.

      The state government had entered an MoU with the Union Government for
      compression of revenue expenditure, enhancement of revenue receipts and
      generation of non-debt capital receipts which it failed to achieve.

      Only eight vacant posts were abolished against a target of 2,000 posts,
      a comprehensive review of existing allowances had not been carried out
      and regulatory authority to revise passenger tariff and policy to
      enhance user charges in proportions to annual price level had not been
      framed. The report also brought out several cases of indifferent
      implementation of development projects. As many as 114 roads sanctioned
      between March, 1977, and December, 2003, remained incomplete even after
      incurring an expenditure of Rs 38.25 crore.

      Similarly, 84 rural water supply schemes and 11 irrigation schemes
      remained incomplete. Only 12,000 hectare of flood-prone area was
      protected as against the target of 2.31 lakh hectare because of
      inadequate provision of funds. Use of material other than that approved
      at Indora, Rohru and Gagret flood-protection divisions led to
      below-specification work costing Rs 65 lakh.

      The state cooperative milk producers federation accumulated losses to
      the tune of Rs 13.46 crore because of gross under-utilisation of
      capacity of chilling plants, which ranged from zero to 18 per cent in
      case of seven plants.

      An amount of Rs 279 crore was incurred without planning because of the
      failure of the Deputy Commissioner to prepare annual action plans under
      the backward areas sub-plan.

      An amount of Rs 30 lakh was paid to the St Bede’s College, Shimla,
      for addition and alterations though there was no provision for it in
      the grant-in-aid rules. A grant of Rs 1.53 crore was released to the
      GGDSD College, Baijnath, for 22 surplus posts of teaching and
      non-teaching staff.

      The arrears of revenue as on March 31, 2005 amounted to Rs 364.89
      crore. Test checks revealed under-assessment and short levy in 852
      cases resulting in loss of revenue amounting to Rs 154 crore for the
      year 2004-05. Incorrect grant of claims in respect of 18 dealers led to
      the non-realisation of sales tax amounting to Rs 23.57 crore. Wrong
      classification of 16 industrial units resulted in short levy of sales
      tax of Rs 1.22 crore.

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