CAG pulls up Himachal for profligate spending

The Comptroller and Auditor General of India has pulled up the Himachal Pradesh government for mounting fiscal liabilities thanks to runaway expenditure on salaries. It also slams the state for non-development, delays in using of funds under central schemes like Sarva Shikha Abhiyan, and faulty implementation of public distribution system (PDS) schemes.

The report of the CAG, tabled in the state assembly on Friday, points out that the state's accumulated public debt is Rs26,415 crore. It says that containing expenditure and improving collection of non-tax revenue could help the state in its path of fiscal correction and reduce dependence upon central funds.

It says the state's liabilities have risen by 46 per cent in the past four years, from Rs18,071 crore in 2006-07 to Rs26,415 in 2010-11. ''These liabilities stood at 2.08 times higher than the revenue receipts at the end of 2010-11,'' the report stated.

The findings also revealed that the government has not been able to achieve three out of the eight targets fixed under fiscal responsibility and budget management (FRBM) during 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 is yet to do so,'' the report pointed out.

It added that revenue on general services like interest payments on loans - a non-development sector - has increased. As much as Rs5,951 crore was been spent on salaries and wages during 2010-11, exceeding the projected  amount of Rs4,455 crore by Rs1,496 crore (33 per cent).