Deferral of salary, pension payments to save Rs 36 Crore annually, states HP CM

Shimla, Sept 4, 

Himachal Pradesh Chief Minister Sukhwinder Singh Sukhu announced during the state assembly session that the decision to defer the payment of salaries to employees until the 5th and pensions until the 10th of every month would save the state Rs 36 crore annually. He explained that this measure was necessary to avoid taking out short-term loans, which the state government has to secure for five days every month to release salaries on the first day.

Giving a  statement on the matter in state assembly on Wednesday CM Sukhu clarified that the decision stems from the timing of the central government’s remittance of the Rs 520 Cr as Revenue Deficit Grant (RDG)  and Rs 740 Cr as share in Central Taxes respectively released on 6th and 10th of each month.

To release salaries on the 1st of every month, the government would need to borrow Rs 40 crore at an interest rate of 7.50% for the five-day gap, which results in an annual financial burden of Rs 36 crore.

Sukhu assured the assembly that the decision is not indicative of a financial crisis but a step towards fiscal prudence. He underscored the need to streamline the state’s expenditure and revenue processes, noting that this decision, is part of the government’s efforts to ensure fiscal prudence and optimize financial management.

Sukhu emphasized that the revised schedule for salary and pension disbursements would not affect autonomous bodies like the Himachal Road Transport Corporation (HRTC) and the State Electricity Board, which will continue to pay their employees on the 1st of each month.

According to him, a monthly expenditure of Rs 1,200 crore on employee salaries and Rs 800 crore on pensions amounts to Rs 24,000 crore annually, and by avoiding unnecessary short-term loans, the state can save Rs 3 (2.85) crore in interest every month.

Also read:Himachal Pradesh Salaries and Pensions delayed for the first time in State’s history

Responding to concerns raised by state employees about their EMIs being due on the 1st of the month, Sukhu mentioned that the government would consider adjusting norms for affected employees to mitigate their issues. He added that the funds saved through this fiscal management would be redirected to necessary public welfare initiatives.

In response to the Leader of Opposition Jai Ram Thakur, who questioned the delayed payments, Sukhu refuted claims of a financial crisis and accused the previous BJP government of leaving significant financial liabilities for the current administration. He pointed out that during 2018-19, 2019-20, and 2021-22, when the government had surplus revenues, it could have addressed pending dues like DA installments amounting to Rs 10,000 crore. Sukhu also criticized the BJP for launching free power schemes and discounts just before the 2022 elections without ensuring adequate funding.

Jai Ram Thakur, during the debate, expressed concern over the delayed payments and accused the current government of financial mismanagement, labeling the handling of state finances as inconsistent and unclear. He highlighted what he saw as contradictions in the Chief Minister’s statements regarding the state’s financial health, with Sukhu claiming both a stable economy and a need for fiscal measures within the same day.

Despite the opposition’s criticism, Sukhu reiterated his government’s commitment to making Himachal Pradesh debt-free by 2027 and financially self-reliant by 2032.

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The HimachalScape Bureau comprises seasoned journalists from Himachal Pradesh with over 25 years of experience in leading media conglomerates such as The Times of India and United News of India. Known for their in-depth regional insights, the team brings credible, research-driven, and balanced reportage on Himachal’s socio-political and developmental landscape.

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Himachalscape bureau

The HimachalScape Bureau comprises seasoned journalists from Himachal Pradesh with over 25 years of experience in leading media conglomerates such as The Times of India and United News of India. Known for their in-depth regional insights, the team brings credible, research-driven, and balanced reportage on Himachal’s socio-political and developmental landscape.