HP govt, Dhumal in war of words over state's fiscal deficit

Former Himachal Pradesh Chief Minister P K Dhumal was today involved in a fresh war of words with Virbhadra Singh-led government over alleged fiscal deficit and "financial mismanagement" and alleged the state was being led to "debt trap".
Blaming the state government for its "bad" financial situation, Dhumal alleged government had raised huge loans in violation of constitutional provisions.
"Government has raised huge loans and is pushing the state into debt trap. If the government is not removed, it would be bad for the state which would fall in the category of 'failed state'," he charged in a statement issued here.

Claiming that the state's economy was on the brink of bankruptcy, Dhumal alleged "corruption, financial mismanagement, massive loans, wasteful expenditure and unbridled bureaucracy were responsible for it."
The BJP leader said that as per a CAG report, the state government had raised loans to the tune of Rs 38,000 crore through market borrowing.
He said that the report has also cautioned that the state would fall in debt trap by 2018-19, adding that the per capita loan of the state has mounted to Rs 80,000.

Accusing the state government of raising fresh loans at higher rates of interest to pay the interest on old loans, Dhumal said the previous BJP government had presented "zero deficit" budget in 2011-12 and projected revenue surplus. But the present Congress government increased the revenue deficit to Rs 576 crore in 2013, Rs 1,641 crore in 2014 and Rs 1,944 crore in 2015.

The fiscal deficit has increased to 4.39 per cent of the state but there was no policy to contain the deficit, Dhumal charged.
The state government, on the other hand, denied the allegations of Dhumal and said that the percentage of loans to State Gross domestic Product (SGDP) was within the prescribed limits under FRBM (Financial Regulations and Budget Management) and government was committed to maintain financial discipline.
"The state government has been managing public finances prudently and the borrowings have been as per approved guidelines given the high growth and developmental initiatives taken by the government for increasing farmers' income and employment opportunities besides funding pro-poor policies and improving the infrastructure," an official spokesman said.