Report No 4 of 2016 - State Finances Himachal Pradesh

Overview

The State achieved the target of reduction of revenue deficit to zero and stood at revenue surplus of Rs. 1,137 crore due to sharp increase in central transfers. Fiscal deficit decreased from Rs. 4,200 crore in 2014 15 to Rs. 2,165 crore during 2015 16 and the State kept fiscal deficit relative to GSDP (1.96 per cent) below the limit prescribed under FRBM/XIVth Finance Commission (FC) (i.e. 3 per cent). Primary deficit of Rs. 1,351 crore in 2014 15 turned to surplus (Rs. 990 crore) during 2015 16.

 During 2015-16, revenue receipts (Rs. 23,440 crore) of the State grew by Rs. 5,597 crore (31.36 per cent) as compared to previous year (13.57 per cent).  Total expenditure (Rs. 25,630 crore) of the State increased by Rs. 2,896 crore (13 per cent) over the previous year (Rs. 22,734 crore). 

The return from investment of Rs. 3,041 crore as of 31 March 2016 in companies/corporations was negligible (Rs. 111.94 crore) i.e. 3.68 per cent while government paid an average rate of interest of 7.89 per cent on its borrowings. 

An amount of Rs. 18.48 crore had been sanctioned to the different loanee/entity as loan during the period 2008-09 to 2013-14 without finalizing the terms and conditions.

Fiscal liabilities at the end of the current year were Rs. 41,197 crore with growth of 8 per cent over the previous year and stood at 37 per cent of GSDP and 176 per cent of the revenue receipts.  During 2015-16, 32 per cent of borrowings were used for repayment of earlier debts defeating the very objectives for these loans.

Financial management and budgetary control

The overall saving of Rs. 191.90 crore registered under grants/appropriations during the year 2015-16. An excess expenditure of Rs. 7,904.32 crore relating to the period 2010-11 to 2015 16 required regularisation under Article 205 of the State Legislature.

Supplementary provision of Rs. 818.51 crore in 15 sub-heads proved unnecessary/ inadequate as either expenditure did not come up to the level of original provision or leaving an aggregate unconcerned excess expenditure.  Re-appropriation of funds in 48 sub heads        (Rs. one crore or more in each case) was made injudiciously which resulted in excess/savings.  In 42 cases (Rs. 10 crore or more in each case), Rs. 3,135.63 crore were surrendered at the end of the financial year.  In 83 cases/sub heads, 100 per cent grant amounting to Rs. 385.80 crore was surrendered.

In six cases, the expenditure incurred during the last 4th quarter of the year ranged between 52 and 70 per cent and the expenditure incurred during the month of March 2016 alone under these heads of accounts constituted 31 to 58 per cent of the total expenditure.

Financial reporting

There were delays in furnishing 2,944 Utilisation Certificates in respect of loans and grants amounting to ` 2,225.40 crore as on 31 March 2016. 

There were 47 cases of misappropriations/loss, theft etc., involving government money amounting to ` 78.70 lakh on which final action was pending as of June 2016.  Out of these, 41 cases were more than five years old.

There were 104 cases of temporary advances aggregating Rs. 34.38 crore pending in the State departments for adjustments as of September 2016.

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