With the electioneering din coming to an end in Himachal and the electorate registering a record percentage of over 74% in the November 9 polling, all eyes are on December 18 when the election results will be announced and the next Chief Minister of the State is decided.
However, the task is cut out for the new CM as the State has all but fallen into a debt trap with a burgeoning debt of almost 50,000 crores and empty State coffers. The CAG (Comptroller & Auditor General of India) report of April 2017 had warned the State government of the imminent danger of falling into a debt trap, and almost 8 months down the line since the warning was given by CAG and no remedial measures being taken by the State Government in the intermittent period, the prophecy could already be true.
With the State duty bound to pay 62% of the debt in the next 7 years (almost 28000 crores & more) and no attempt to mobilise additional revenue by tapping the vast tourism potential, the would be CM will surely have a crown of thorns on his head. According to CAG the per capita debt has increased from almost Rs. 40,000 in 2011-12 to almost Rs. 58,000 in 2015-16 showing a whopping jump of over 40% which is worrisome.
The CAG report had also cast aspersions on the flawed debt policy of the State as the borrowing rate of the government was almost 8% (7.89 to be precise) and far in excess of the returns which were absymally low at almost 4%(4.10). With this government indulging in record borrowings over the last 5 years, the next government will be treading on thin ice and will have to work with a magic wand to repay the interest and principal.
The hill State of Himachal has meagre resources and one major resource and revenue earning avenue (tourism) has remained largely ignored and untapped.The failure of successive governments to harness & tap the vast and varied tourism potential of the State has meant that tourism is a languishing industry in the State (inspite of having some of the most breathtaking sites in the world) and is mostly playing second fiddle to states like Jammu & Kashmir and Uttarakhand.
A case in point is the picturesque & stunning location of Khajjiar in Chamba district of Himachal which is also referred to as mini Switzerland because of it’s ravishing topography with a thick foliage of deodar trees encircling a vast green stretch of level terrain with a lake right in the centre leaving the beholder spellbound. However, State apathy and negligence over the years has turned this serene lake into a marsh land which has robbed the place of it’s majesty leaving the tourists & locals bewildered at the gross negligence and indifference of successive State governments.
An industry which could have been a money spinner for the State and warmed the State’s coffers, getting rid of its financial problems, has been lying relatively unexplored & untapped. The fiscal liabilities of the State have increased by an average of 46% from 2011-12 to 2015-16 which is an alarming trend, and going by this rate the State’s debt which was at 41,000 crore in 2015-16 has surpassed the 50,000 crore mark and is a frightening 40% of the GSDP.
The government’s decision to give a 100% pay hike to the MLAs (which was passed in the Vidhan Sabha without a whimper) has further burdened the State with an additional 16 crores annually adding to the financial burden.
The people of the State have cast their franchise in the hope that a new government will usher in a new era in the state’s development but with the State’s finances under a severe crunch and the money meant for development being diverted to service the huge debt, the people’s hopes could be misplaced.
Did you like this article? We’re a non-profit. Make a donation and help pay for our journalism.