Centre reduces Himachal Pradesh’s Borrowing limit by Rs 5,000 Crore

Shimla, May 29

Narendra Modi-led Central government has decided to reduce the state’s annual borrowing limit from Rs 14,000 crore to Rs 9,000 crore, cutting it by Rs 5,000 crore. Chief Minister Sukhvinder Singh Sukhu of Himachal Pradesh is scheduled to meet with Union Finance Minister Nirmala Sitharaman on Monday.
Speaking at an OPS rally in Dharmshala on Sunday, Sukhu expressed his concern over the central government’s treatment of Himachal Pradesh, terming it as step-motherly. He criticized the reduction of the state’s borrowing limit and accused the Modi government of discrimination, calling it an attack on federalism.
Additionally, the state government has been pressuring the central government to release Rs 9,242.60 crore deposited under the New Pension System with the Pension Fund Regulatory and Development Authority (PFRDA). Chief Minister Sukhu characterized this situation as the state being forced to beg the central government for the release of funds.
This issue has been raised by the Himachal Pradesh government on multiple occasions, including during the recent NITI Aayog meeting, where they urged the central government to direct the PFRDA to return the deposited amount.
The Chief Minister also appealed to the central government not to reduce the previous year’s deposit of Rs 1,779 crore under the New Pension System, as it would go beyond the borrowing ceiling for the current financial year, 2023-24. He further requested a review of the decision made on March 27, 2023.
During the COVID-19 pandemic, the central government allowed states to exceed their borrowing limits beyond the Fiscal Responsibility and Budget Management (FRBM) ceiling. However, from this financial year, the central government has reduced the borrowing limit for states and halted the additional Central assistance provided as GST compensation, affecting several crores
Notably, the relationship between non-BJP governments and BJP-led governments in North India has been strained, with instances such as the recent opposition of the Haryana government to the Himachal Pradesh government’s decision to levy a Generation Tax on the state hydropower project.
Recently, the central government issued a letter of protest to Himachal Pradesh, asserting that levying a Generation Tax was against the law, as power and water cannot be taxed by any state.
On Sunday evening, Chief Minister Sukhu also met with Delhi Chief Minister Arvind Kejriwal, as the latter is attempting to garner opposition support following the central government’s overnight ordinance to gain administrative control over the National Capital Region (NCR).
According to a state government press release, the two non-BJP leaders and Chief Ministers discussed various common issues between their respective states. The Chief Minister of Himachal Pradesh addressed topics such as electric supply for the upcoming Bulk Drug Park in Una district, seeking support from the Bhakra Beas Management Board. He also discussed water-sharing agreements for the Renuka and Kishau hydro projects and emphasized the need for their prompt completion.
Thakur Sukhvinder Singh Sukhu stated that high-level discussions would take place to establish a Memorandum of Understanding between the Delhi and Himachal Pradesh governments concerning the sharing of Yamuna river water.


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