HP Assembly amends bill to enhance borrowing limit 

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Photo used for indicative purpose only. Source: Internet
Shimla, August 13
The Himachal Pradesh Assembly passed FRBM amendment Act 2022 amidst opposition from Congress to enhance the limit of borrowings of the government.
The Chief Minister who holds the portfolio of finance defended the move to amend the FRBM Act by stating that it was due to covid pandemic that the global economy had taken a hit and Himachal too had not remained untouched.
He said that it was the previous Congress Government responsible for the grim financial health of the State. He disclosed that the fiscal deficit in 2013-14 was 4.23 per cent which touched  4.70 per cent in 2016-17. “We managed to bring it down to 2.70 per cent and it presently stands at 2.99 in 2021-22.
Since our borrowing limit has been fixed at three per cent under the Act, we are making an amendment in case it exceeds this permissible limit,”  Chief minister added.  He said that actual receipts of taxes declined during 2020-21 because of COVID – 19 pandemic due to which receipts of share of State in Central taxes also got affected.  ” Due to the decline in Goods and Services Tax Compensation, the Central Government has allowed additional borrowing of 2 percent of GDP in the financial year 2020-21.
He said  that in order to maintain the pace of development which has been affected by COVID – 19 pandemic , the State Government has availed partially additional borrowing. Sec. ten of the new amended bill said that the fiscal deficit may exceed the level of three per cent but shall not exceed four percent of the estimated gross GDP in FY 2020-21. The state could exceed the fiscal deficit and could borrow more from the state owned finance resources.
The State Government said that the as per state GDP in 2022-2, the fiscal deficit remained 4.5 pc in 2021-22 and four pc till July 20, 2022-23.
Earlier participating in the discussion Leader of Opposition Mukesh Agnihotri accused the state Government of indulging in extravagance by purchasing luxury vehicles, bullet proof cars, helicopters and holding mega events. “What is the need of purchasing a bullet proof car in a peaceful state like Himachal and the Chief Secretary being allowed to buy a Rs 50 lakh vehicle for him,”  LoP pointed out that BJP government is indulging in wasteful expenditure by holding party rallies and events from the government expenditure. He also charged the BJP rule of failing to seek a loan waiver or financial package from the Modi regime. “You make tall claims about a double engine government but please state what extra has the Modi regime given to Himachal,” he said.
He also accused the Government of wasting huge amounts on advertisements and hoardings even at Delhi and Chandigarh airports. The CLP Leader said the BJP was pushing the State on the brink of bankruptcy, making it difficult for any government in the future to improve the financial health of the State.
He cautioned that after 2023 state would not get Rs 3500 Cr GST allocation, ending 2023, likely to put the state finances in trouble.
The amended legislation would enhance the borrowing limit of state government from three per cent of state GDP to four per cent.
The bill was presented in the house to be passed with voice votes amidst protest by the Congress and CPI(M) members.

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