Himachal’s Fiscal Deficit Is Alarming

Vijay Sharma

(The writer is based at Himmer, Hamirpur)

Himachal Pradesh Chief Minister Jai Ram Thakur presented his first budget to boost the agricultural productivity. He announced a slew of measures for the farm sector benefitting thousands of farmers of this hilly state. This will transform the farm sector in a big way, increase farmers income and help them to achieve higher growth. Agriculture is the main occupation and the major source of employment in the state, as about 90% of the population lives in rural areas. With suitable agro-climatic conditions, Himachal Pradesh has realised the importance of commercial crops, including off-season vegetables, potatoes and ginger. The state has emerged as the leading producer of off-season vegetables.

A slew of measures including Rs 1,134 crore to be spent under the World Bank funded Horticulture Development Project, Rs 500 crore to be spent for Command Area Development in five years, Rs 277 crore for Minor Irrigation Schemes, Rs 85 crore for Medium Irrigation schemes and Rs 250 crore under a new scheme for irrigation will further provide impetus to agriculture sector in Himachal Pradesh. The government has tried to provide relief to farmers by cutting electricity tariff from Re 1 to 73 paisa per unit and withdrawal of levy of certain goods carried by roads (CGCR) on apple, other fruits and vegetables from 2018-19. Besides this 40% subsidy will be given on machinery for setting up of “Agriculture Equipment Hiring Centres” and Rs 32 crore for subsidy to farmers and horticulturists on power weeders and power tillers etc. No doubt there is plenty in the budget for farmers and labour class with MNREGA to be extended from 100 days to 120 days. Milk to be costlier by Re 1 to benefit milk producers. Rs 23 crore sanctioned for polyhouse construction and Rs 8 crore more for anti-hail nets in apple producing areas. But the worrying concern is no measure has been introduced or mentioned in the budget to bring down fiscal deficit.

As per the budget estimates, the total revenue receipts are estimated at Rs 30,400 crore and the total revenue expenditure is estimated to be Rs 33,568 crore with a revenue deficit of Rs 3,168 crore. In 2005, the state government had enacted Fiscal Responsibility and Budget Management Act (FRBM). The revenue deficit was supposed to have been brought to zero during 2011-12 and maintain a revenue surplus situation in 2011-12. But the state experienced a revenue deficit of Rs 576 crore in 2012-13,  Rs 1,641 crore in 2013-14,  Rs 1,944 crore in 2014-15, Rs. 3,284 crore in 2015-16, Rs. 4,076 crore in 2016-17, Rs. 4,946 crore in 2017-18 respectively. The fiscal deficit for 2018-19 is likely to be Rs 7,821 crore. No new tax was proposed last year by the Virbhadra government due to election year. New BJP government has also not proposed any new tax due to the Lok Sabha election due in 2019. Fiscal deficit is increasing continuously but the state government has no policy or scheme to bring down the fiscal deficit which is alarming.

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