Govt presents a legislation to increase borrowing limit of state

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Shimla, Mar 15

Amid strong opposition by the Congress members in the state assembly Jai Ram Thakur Government presented the Himachal Pradesh Fiscal Responsibility and Budget Management amendment bill 2021 to increase the borrowing limit of the state. Chief Minister Jai Ram Thakur who also hold the portfolio of Finances presented this amendment bill said that the state Government would not have been under such whooping debt burden if Congress Governments would not have left the liability to tune of Rs 50,000 Cr on the state.

Even the Comptroller and Auditor General (CAG) of India in its report had pointed that the state had not yet amended the Fiscal Responsibility Management Bill Act as recommended by the 14th Finance Commission. Also read:https://himachalscape.com/hp-has-not-amended-fiscal-responsibility-management-bill-act-cag/
” HPFR&BM Act enacted in the year 2005 was being amended as actual receipts of Central taxes declined during 2019-20 due to which share of States also got affected.”
” The Government of India has allowed one time special dispensation for additional borrowing to compensate States for lower devolution of Central taxes on 26th February, 2020 subject to amendment in the Fiscal Responsibility and Budget Management Laws.”
Thakur said that State received one time receipts from the Union Government on account of its share of Compensatory afforestation fund Management and Planning Authority (CAMPA) Fund credited in the Public Account, which is included in the public debt of the State.”
” To enable the State Government to avail additional borrowing in public interest and to maintain the pace of development, the fiscal deficit could not be maintained at the level of 3 per cent of the estimated Gross State Domestic Product in the financial year 2019-20. ”
Chief Minister stated that it has become necessary to amend the Himachal Pradesh Fiscal Responsibility and Budget Management Act, 2005 suitably from lst January, 2020. Thakur said that provisions of the Bill, when enacted, should be enforced through the existing Government machinery.

On clearance of the said amendment, State Government will now be able to borrow up to two per cent additional than the present limit of three per cent of Gross State Domestic Product for the year 2019-20 which compensated it for loss of revenue of the State and helped to maintain the pace of development. The fiscal position of the State will be impacted accordingly, CM added.

Commenting Leader of Opposition Mukesh Agnihotri said that the Govt wants to burden the state with more debt as it wants to increase the borrowing limit by amending HP FRBM Act. Opposition leader said that the govt proposed to increase the limit of taking credit by enhancing its capping limit from 3.50 pc to five percent of the state GDP. Seeking to immediately withdraw the legislation, he said that Government is trying to put the state into financial mess which is fatal for the future of state economy.
CPI(M) member Rakesh Singha wanted to record his comments on the legislation but he
was not allowed by the speaker.
Amid the protest of Congress Speaker Vipin Singh Parmar tabled the bill for division of the house, which was passed by voice vote. The discussion on the bill would be held in the left out days of this budget session.

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