Himachal Cabinet to forgo salaries for 2 months; know why
What's the story
The Himachal Pradesh Cabinet, led by Chief Minister Sukhvinder Singh Sukhu, has announced a two-month salary and allowance waiver due to the state's severe financial crisis. This decision will affect cabinet members, including chief parliamentary secretaries and chairmen and vice-chairmen of boards and corporations. The CM urged all assembly members to voluntarily follow suit in his statement to the House on Thursday.
Financial concerns
State's revenue deficit and central funds delay
CM Sukhu expressed concern over the state's financial condition, noting a reduction in the revenue deficit grant for 2023-24 from ₹8,058 crore to ₹6,258 crore this fiscal year. He also highlighted a delay in receiving central funds for last year's natural calamity that claimed over 700 lives and caused significant damage to public and private property. "The state is still awaiting a ₹9,042 crore grant under the Post Disaster Need Assessment from the Centre," he said.
Revenue challenges
Pension scheme changes and GST compensation halt
The CM also addressed financial challenges stemming from a return to the Old Pension Scheme (OPS) for all government employees. He stated that despite repeated pleas, the Centre has not provided ₹9,200 crore as part of the new pension scheme deduction. Additionally, the cessation of GST compensation from the Centre has reduced state revenue by almost ₹2,500-₹3,000 crore annually, he added.
Debt accumulation
State's debt and housing shortages in Shimla
"The state's situation is not good, and if anyone is responsible for this, it is the previous BJP government. They had received around ₹10,000 crore from the revenue deficit grant according to the 15 Finance Commission, and since then this grant has been reducing," Sukhu said at a press conference. The hill state, which largely relies on tourism, horticulture and hydropower for its economy, has accumulated a debt of ₹75,000 crore since December 2022.