Himachal's fiscal liabilities up 46 percent: CAG

Shimla, April 6 (IANS) The fiscal health of Himachal Pradesh has deteriorated as there has been an increase in liabilities by 46 percent in the past four years, the Comptroller and Auditor General of India (CAG) said Friday.

The fiscal liabilities have increased from Rs.18,071 crore in 2006-07 to Rs.26,415 in 2010-11, said the CAG, whose report was tabled in the assembly.

These liabilities stood at 2.08 times the revenue receipts at the end of 2010-11.

"The state government was required to set up a consolidated sinking fund as recommended by the 12th Finance Commission for amortisation of market borrowings as well as other loans and debt obligations but it has not yet been set up."

The CAG blamed the alarming deterioration in the financial position to high expenditure on salaries and wages.

The expenditure of Rs.5,951 crore on salaries and wages during the last fiscal was Rs.1,496 crore (33 percent) and Rs.2,113 crore (55 percent) more than the projection of Rs.4,455 crore in medium term fiscal plan statement and the Finance Commission Rs.3,838 crore requiring attention of the state government.

It said the state had got insignificant returns from the investments.

While the government raised high cost borrowings from the market in 2006-2011 at an average interest rate 8.81 percent, the return from investments of Rs.2,864 crore during the period was 1.78 percent.

It said the revenue deficit and fiscal deficit was 2.36 and 4.83 percent, respectively, of the gross state domestic product during 2010-11 which was higher than the projection made by the Finance Commission.

The CAG observed that the dependence of the state on central transfers was 58 percent in 2010-11.