The cash-strapped Congress government in Himachal Pradesh, whose debt liabilities increased to Rs 76,651 crore in 2023, has been facing the worst financial crisis with no budget to pay salaries for 2.15 lakh employees and 90,000 retired employees.
Employee leaders on Tuesday said this was the first time in the state’s history that the salaries have not been paid. They blame the government for acquiring luxuries for ministers and political appointees.
However, officials believe the state is awaiting a Rs 520 crore revenue deficit grant from the Centre, which is likely to come by September 6, and that amount will be used to disburse salaries.
Financial experts blamed financial mismanagement and wasteful expenditure for the deep financial crisis. They blame the ever-swelling wage and pension bills that are pushing the small hill state, which has been banking heavily on borrowings through market loans with an estimated debt of Rs 86,589 crore, besides committed liabilities of over Rs 10,000 crore pertaining to arrears of employees and pensioners, to the wall.
The Himachal Pradesh Employees Federation at its meeting in Shimla has declared that if the demands of the secretariat employees are ignored by the government, it will have to face the consequences.
Federation leader Hira Lal Verma said the government needed to consider the demands of the employees. Also, he emphasised that there should be a dialogue between the government and employees as they are fighting for their rights.
Joining the issue, Rogi Kalyan Samiti (RKS) workers went on an indefinite strike on Monday in protest against the non-fulfilment of the long-pending demand for a regular pay scale, impacting services in Out Patients Departments (OPDs), registration counters and cash counters, in the state-run Indira Gandhi Medical College and Hospital (IGMCH).
The RKS employees, who had been on a six-hour pen-down strike for the past few days, decided to go on the indefinite strike after their demands were not accepted.
Barring emergency services, RKS Employee Union president Arvind Pal on Tuesday said the strike would continue until their demand was met by the government.
Chief Minister Sukhvinder Sukhu, who also holds the Finance portfolio, in a written reply to the Assembly, said the state has borrowed Rs 21,366 crore in the past three fiscals.
Admitting the grim financial condition with a major portion of money going towards repayment of loans and salaries of the employees, in his Budget speech for 2024-25 Sukhu blamed the previous BJP government for the financial mess.
“Our government is facing many challenges due to financial mismanagement and wasteful expenditure sprees practised by the previous government. Due to wrong policies in the past, total liabilities in the form of loans have risen to Rs 87,788 crore. The total debt liabilities have increased from Rs 47,906 crore in 2018 to Rs 76,651 crore in 2023.
“The previous government implemented the Sixth Pay Commission recommendations for Himachal government employees at the end of its tenure, which could have been implemented earlier. Due to this delay, the arrears on account of the revised salaries of the employees kept increasing and their liabilities were handed over to our government. But the present government did not allow the pace of development to slow down due to lack of resources,” he said.
Pinning hope on Central indulgence, he said the state government has sent a proposal of Rs 9,906 crore to the Centre as a relief for the loss caused by the natural disaster in 2023 on the basis of Post-Disaster Needs Assessment. (PDNA). Besides, about Rs 8,000 crore have been lying with the Government of India on account of the contribution made by the employees who have shifted from the National Pension System (NPS) to the Old Pension System (OPS). Also, the state is yet to receive about Rs 4,500 crore from the share in the projects of the Bhakra-Beas Management Board.
As per budget estimates, out of every Rs 100 spent, Rs 26 is being spent on salary, Rs 16 on pension, Rs 10 on interest payment, Rs 10 on loan repayment, Rs 9 on grant to autonomous institutions, while the balance Rs 29 is being spent on other activities, including capital works.
“Himachal is spending over 60 per cent of the budget to pay salaries, pensions and repay loans, the old pension scheme is unsustainable in the long run and would lead to bankruptcy of the state,” a senior bureaucrat admitted to IANS.
Tourism, horticulture and hydropower generation are major contributors to Himachal Pradesh’s economic development.
The Opposition BJP has accused Sukhu of coming to power on the basis of false promises.
Leader of Opposition and former Chief Minister Jai Ram Thakur said the government employees have been awaiting their salaries. “They check every message on their phone thinking their salary has come. They are calling their colleagues and people from other departments are asking whether their salary has come. To date, such a situation has never arisen in the state that employees had to wait for their salary,” he said.
The BJP leader said Chief Minister Sukhu says that there is no financial crisis. “When there is no financial crisis, then why is the salary not coming? The government should clarify the situation... when will the salary of the employees and the pension of the pensioners come? Employees do not have any other means of income, they have to feed their families with their salary only. In such a situation, how will the family survive without a salary?” he asked.