Govt to raise Rs 250 cr loan

Pratibha Chauhan

Tribune News Service

Shimla, August 16

With a debt of over Rs 50,000 crore, cash strapped Himachal government has decided to raise a loan of Rs 250 crore to meet its development needs.

Chief Minister Jai Ram Thakur announced 4 per cent Dearness Allowance to the employees and pensioners of the state government during his address at the state level Independence Day function here in the state capital yesterday. The DA will be payable to over 2.50 lakh employees from January 2019 onwards. Officials said that this announcement alone would put an additional burden of almost Rs 260 crore on the state exchequer.

The notification issued by the finance department for raising the Rs 250 crore loan today said that the proceeds of the state government securities will be utilised for the development programmes of the government. It specified that the consent of the Central government has been obtained to the floatation of this loan as required under Article 293 (3) of the Constitution.

Even though the notification spelt out development needs as the main objective for raising loans, it is being felt that the hefty salary and pensionary burden on the state government is another reason for frequent raising loans. The stock will be of 10-year tenure. The tenure will commence on August 21, 2019 and it will be repaid at par on August 21, 2029.

In the absence of major revenue generating resources, the state government is heavily dependent on the Centre for funding, taxes and other collections. In fact, most of the welfare and development schemes are of the Centre and almost fully funded, be it in the health, education, sanitation, drinking water, roads and housing sectors are concerned.

The BJP regime on assuming power in December 2017 had identified industry, tourism and power as the major revenue generating areas to enhance resources. It is with this objective in mind that the BJP regime has planned Global Investors Meet at Dharamsala later this year. The government has already MoUs worth thousands of crores.

Investors meet and road shows have been held not just in Gujarat, Delhi and other cities in India but also abroad in Dubai, Germany and the Netherlands. Time will tell as to how many of these MoUs will translate into investment. Similar initiatives during the Congress regime had failed to yield encouraging results as very few industrialists fulfilled their commitment.