Former CM Shanta Kumar seeks increase in borrowing limit for Himachal
Citing “wrong precedent” to other states, the Union finance ministry has turned down the request of the Himachal government to increase the borrowing limit to help it tide over fiscal challenges while stressing on states should “strengthen their economy”
Days after the finance ministry turned down the request of increasing borrowing limit, former chief minister and BJP veteran Shanta Kumar has urged the Centre to consider the request of the state.
Citing “wrong precedent” to other states, the Union finance ministry has turned down the request of the Himachal government to increase the borrowing limit to help it tide over fiscal challenges while stressing on states should “strengthen their economy”. In July this year, chief minister Sukhvinder Singh Sukhu had called on the Union finance minister Nirmala Sitharaman at New Delhi and urged for an increase in borrowing limit of the state by 2%. In May 2023 the central government reduced the borrowing limit of Himachal and other states from 5% to 3% of GDP. This has further increased the difficulties of the state government which is facing the financial crisis.
After CM’s request was turned down by the Centre, saffron party’s veteran leader and former union minister, Shanta Kumar spoke to Union finance minister requesting her to consider the state’s request to enhance the borrowing limit. “I told the Union finance minister that at present there is no paksh or vipaksh, we have to work together to rebuild the disaster hit Himachal Pradesh. She assured me that she will consider my request,” said Kumar.
“The state is facing large-scale devastation and the state’s fiscal health is not good, in case the borrowing limit is not enhanced, the state will face a lot of difficulty,” he said while talking to HT.
The state government has a debt of ₹1.03 lakh crore. The committed liability of the government on payment of salary and DA to employees and the pensioners was about ₹30,000 crore per annum and 13% pending DA instalments and arrears.
Earlier this month, Shanta Kumar had written to the Prime Minister Narendra Modi seeking special grant for the state following the devastation during the monsoon.
