The increase in debt during the recent years was mainly because of the sharp reduction in revenue deficit grant during 2013-14 and 2014-15 coupled with the increased salary burden due to pay scale revision, the Chief Minister informed the assembly.
He said the revenue deficit grant, which was Rs 2,232 crore for the first year (2010-11) of the award period was reduced sharply to Rs 406 crore for the last year (2014-15) of the 13th Finance Commission's award period.
Replying to the budget discussion, the Chief Minister said there was overestimation in the recommendations of the 13th Finance Commission on account of the share in central taxes for the year 2013-14 and 2014-15.
"Actual receipt during these two years remained Rs 528 crore less as compared to the amount estimated by the 13th Finance Commission. Thus in 2013-14 and 2014-15 the state had to borrow more than three per cent of the Gross State Domestic Product (GSDP), to keep the pace of development in the state," he said.
He said the 14th Finance Commission had also overestimated the tax devolution for 2015-16 and 2016-17. During 2015-16, the state received Rs 3,611 crore as against the estimation of Rs 4,441 crore.
"The tax devolution will be Rs 4,343 crore during the current year 2016-17 as against Rs 4,778 crore estimated by 14th Finance Commission in its recommendations. As such we have received Rs 966 crore less during first two years of the 14th Finance Commission award period."
Virbhadra Singh, who also holds the finance portfolio, said the state government has succeeded in bringing down the debt-GSDP ratio to 34.8 in 2014-15 as against 40.1 targeted by the 13th Finance Commission.
Further, the state has raised all market loans only after obtaining the approval of the government of India.
"The efforts of the state government have been to raise need based borrowing within authorised ceiling and during the current year too we have decided not to go beyond the authorised limit," he said while replying to the opposition BJP charge of raising whopping loans.
The Chief Minister clarified that the state has a low tax base.
"However, the state government has been making efforts to increase tax revenue through efficient tax collection. The tax revenue of the state which was Rs 4,626 crore in 2012-13 has increased to Rs 6,341 crore in 2015-16 and likely to be increased to Rs 7,945 crore during 2017-18," he added.
The Chief Minister on March 10 presented a populist but deficit Rs 35,783-crore budget for 2017-18 with no new taxes.
Not satisfied with his reply, the BJP staged a walkout.
Leader of Opposition Prem Kumar Dhumal told reporters: "We staged a walkout as the Chief Minister was just blaming the centre for its own financial mess despite getting huge financial assistance from the centre."
Himachal Pradesh's economy is highly dependent on hydroelectric power, horticulture and tourism.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)