Himachal calling: Financial crunch stares Sukhvinder Sukhu govt in the face
Pratibha Chauhan
Shimla, July 17
Having braved the political upheaval triggered by cross-voting by six Congress MLAs in the Rajya Sabha polls, Chief Minister Sukhvinder Singh Sukhu is faced with the challenge of keeping the wheels of development running despite the grave financial crisis faced by the cash-strapped hill state.
Having faced nine assembly bypolls within 18 months of the formation of the Congress government in the state, the possibility of any immediate political crisis, at least in the immediate future, seems unlikely. However, the severe resource crunch and little hope of any assistance from the Centre is increasingly making it difficult for the debt-ridden Congress government to manage its day-to-day affairs, including footing the huge salary bill and pension of serving and retired employees.
It is under such severe financial crisis that Sukhu has shown the courage to take a harsh decision of the withdrawal of the power subsidy being enjoyed by domestic consumers, who are income tax payers. With no election in the near future and the Assembly poll almost three-and-a-half years away, Sukhu has tactically chosen the timing of pushing through these unpopular decisions. Interestingly, the Congress tally in the Vidhan Sabha is back to 40, exactly what it was after the 2022 Assembly poll and the BJP at 28 after winning three seats.
As expected, the move has not just drawn the ire of the Opposition, but also the so-called well-off who are used to freebies and subsidies. Some more such decisions of slashing subsidies and concessions could follow, with little hope of any financial assistance from the Centre and the mounting debt crossing Rs 85,000 crore.
With mining, tourism and power being the only three revenue generating sectors hit severely by Covid and the unprecedented rain last year, there are hardly any other resource avenues. The victory in six of the bitterly fought nine Assembly bypolls has not only consolidated the position of Sukhu, but given him the courage to take bold decisions like the withdrawal of subsidies, which rarely any Chief Minister would take considering its adverse political fallout.
Notwithstanding the defeat in all four Lok Sabha seats, Sukhu has managed to silence his detractors by winning six Assembly bypolls, with his wife Kamlesh Thakur’s win being the cherry on the cake.
The pulsating turn of dramatic political events in HP, traditionally a bipolar polity, had taken the otherwise calm hill state by storm. Rebellion by six Congress legislators in February took everyone by surprise as nobody could fathom that the murmurs of dissent would result in such a big revolt. The Congress cried hoarse over “Operation Lotus” being played out to topple its government, with the BJP according a red-carpet welcome to the six Congress rebel MLAs and three Independents in the hope of getting majority to form the government.
The battered economy, derailed by the havoc wreaked in the last monsoons, is yet to recover as the infrastructure like roads and bridges have still not been permanently restored in the absence of funds. The state is awaiting the grant of Rs 9,040 crore from the Centre, based on the Post Disaster Need Assessment after the last year’s unprecedented rain.
A Cabinet sub-committee on resource mobilisation has been constituted to recommend fiscal prudence and cut on wasteful expenditure, besides suggesting ways to generate the much-needed revenue. However, the ending of the GST allocation and cut in revenue deficit grant (RDG) is making the going even tougher for the hill state with very limited means of revenue generating areas.
Little help from Centre
Severe resource crunch and little hope of any assistance from the Centre is increasingly making it difficult for the debt-ridden Congress government to manage its day-to-day affairs, including footing the huge salary bill and pension of serving and retired employees
