Himachal's Congress Government Struggles to Pay Salaries and Pensions

The cash-strapped Congress government in Himachal Pradesh, whose debt liabilities shot up to Rs 7,6651 crore in the year 2023, faced its worst financial crisis with no budget allocated for paying salaries to 2.15 lakh employees and 90,000 retired employees.

Employee leaders termed it for the first time in the state's history that the salaries were not paid. They blamed the government for acquiring luxuries for ministers and political appointees.
Nonetheless, officials believe the state is waiting to get a Rs 520 crore revenue deficit grant from the Centre, likely to come by September 6, and that amount will be distributed to pay salaries.

Financial analysts have blamed financial mismanagement and unwanted expenditure for the deep financial crisis. They blame the ever-swelling wage and pension bills that are pushing the small hill state-which has been banking heavily on borrowings through market loans with an estimated debt of Rs 86,589 crore, besides committed liabilities of over Rs 10,000 crore pertaining to arrears of employees and pensioners-to the wall.

At a meeting convened in Shimla, the Federation said if the government did not pay heed to the demands of the secretariat employees, then it would have to face the consequences.

Federation leader Hira Lal Verma said, "The demands of the employees need to be considered by the government." Besides, he affirmed that there should be a dialogue between the government and employees as the latter are fighting for their rights.

Joining the issue, workers of the Rogi Kalyan Samiti (RKS) went on indefinite strike on Monday in protest against the non-fulfilment of the long-pending demand for a regular pay scale. Services at the OPDs, registration counters and cash counters were affected in the state-run Indira Gandhi Medical College and Hospital (IGMCH).

The six-hour pen-down strike by the RKS employees for the past few days was thus upgraded to indefinite strike as their demands were not accepted.

Barring the emergency services, RKS Employee Union president Arvind Pal on Tuesday said the strike would continue till their demand is met by the government.

Chief Minister Sukhvinder Sukhu, who also holds the Finance portfolio, in a written reply to the Assembly, said the state has borrowed Rs 21,366 crore in the past three fiscals.

Admitting the grim financial condition with a major portion of money going towards repayment of loans and salaries of the employees, in his Budget speech for 2024-25 Sukhu blamed the previous BJP government for the financial mess.

The financial mismanagement and the extravagant expenditure spree practiced by the previous government have brought many challenges to our government. Against the backdrop of wrong policies in the past, the total liabilities in the form of loans reached Rs 87,788 crore. The total debt liabilities increased from Rs 47,906 crore in the year 2018 to Rs 76,651 crore in 2023."

It was in the dying years of the previous government that the Sixth Pay Commission recommendations for Himachal government employees were implemented, which should have been implemented earlier. This delay resulted in continuous increase of arrears on account of revised salaries of the employees and fell as liability on our government. But the present government did not allow the pace of development to slow down due to lack of resources, he said.

He said a proposal of Rs 9,906 crore has been sent to the Centre by the state government on the basis of PDNA as a relief for the loss caused by the natural disaster in 2023 with pinning hope on Central indulgence. Apart from this, around Rs 8,000 crore have been lying with the Government of India on account of the contribution made by the employees who have shifted from the NPS to the Old Pension System. Also, it was said, the state is yet to receive around Rs 4,500 crore from the share in the projects of the Bhakra-Beas Management Board.

The budget estimates, on the other hand, suggest that for every Rs 100 spent, Rs 26 is being spent on salary, Rs 16 on pension, Rs 10 on interest payment, Rs 10 on loan repayment, Rs 9 on grants to autonomous institutions, while the balance Rs 29 is being spent on other activities, including capital works.

Himachal is spending more than 60 per cent of the budget to pay salaries, pensions and repay loans, the old pension scheme is unsustainable in the long run and would lead to bankruptcy of the state," a senior bureaucrat confided in IANS.

Tourism, horticulture, and hydropower generation are some of the major contributors to Himachal Pradesh's economic development.

Opposition BJP accused Sukhu of coming into power on the basis of false promises.

Leader of Opposition and former Chief Minister Jai Ram Thakur said, "Government employees are waiting for salaries. "They check every message on their phone thinking their salary has come. They are calling their colleagues and people from other departments are asking whether your salary has come. To date, such a situation has never arisen in the state that employees had to wait for their salary," he said.

Chief Minister Sukhu is saying that there is no financial crisis. "When there is no financial crisis, then why is the salary not coming? The government should clarify the situation… when will the salary of the employees and the pension of the pensioners come? Employees do not have any other means of income, they have to feed their families with their salary only.". How could the family exist without a salary?" he asked.