CM himachal seeks Rs. 3,000 crore financial assistance from Centre

Published on August 25, 2010 by INVC · 1 Comment

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Prof. Prem Kumar Dhumal, Chief Minister, has urged Dr. Manmohan Singh, Prime Minister to provide a Special Financial Assistance of Rs. 1,500 crore to the State for current financial year to tide over the gap caused by underestimation of the committed liabilities of the State by the 13th Finance Commission and additionally Rs. 1,500 crore as Special Plan Assistance during next financial year, 2011-12. Request to this effect has been made by the Chief Minister in a letter written to the Prime Minister requesting him to help the State overcome its financial liabilities.

Chief Minister said that the State had a committed liability of over Rs. 2,200 crore on account of salary and pension arrears for the period from January 1, 2006 to August 31, 2009 caused due to the implementation of 6th Pay Commission Recommendations for its employees. He said that the 13th Finance Commission had under estimated State salary, pension and interest liabilities. He said that the under-estimation for 2010-11 alone on above liabilities amounted to Rs. 861 crore. He said that there was a gap of Rs. 617 crore between the budget estimates for salaries and the amount assessed by the 13th Finance Commission for current financial year. He said that the Commission had recommended a growth in salary expenditure by only 2.27 percent for 2011-12 over 2010-11 while the State Government had already released dearness allowance installment of 8 percent to its employees which was in addition to the annual incremental benefits to the employees.

Prof. Dhumal said that the State Government would be at a loss to conceptualize its Annual Plan for the next financial year, 2011-12, in respect of its committed liabilities. He said that with a view to recapitulate the matter, the Planning Commission had approved the 11th Five Year Plan for the State of Rs. 13,778 crore. He said that the actual plan expenditure by the State during 2007-08 and 2008-09 was Rs. 2.036 crore and Rs. 2,310 crore respectively and provisional plan expenditure for 2009-10 had been estimated at Rs. 2,759 crore while the plan size for 2010-11 had already been fixed at Rs. 3,000 crore. He said that it implied that the Plan size for 2011-12 should be that of Rs. 3,578 crore if one were to achieve the original plan size of Rs. 13,778 crore for the 11th Plan. He pleaded that in fact if one takes into account the inflationary impact the plan size for 2011-12 had to be even higher otherwise the State would not be in a position to conceive a reasonable plan size for 2011-12 unless the Planning Commission provides State a substantial Special Plan Assistance during next financial year through an enhancement of atleast Rs. 1,500 crore as compared to Rs. 782 crore during 2010-11.