Manohar Lal Khattar: Challenges before new BJP Haryana chief minister

Written by PTI | Chandigarh | Updated: Oct 26 2014, 22:31pm hrs
Manohar Lal KhattarWith Manohar Lal Khattar being sworn in as Haryana's Chief Minister today, the BJP-led regime will have a tough job on its hands. (Reuters)
With Manohar Lal Khattar being sworn in as Haryana's Chief Minister today, the Bharatiya Janata Party-led (BJP) regime will have a tough job to put state's fiscal situation in order as it faces huge revenue deficit and ballooning debt in the wake of "populist" decisions taken by the previous incumbent, says an expert.

It is also going to be a major challenge for the first BJP led Haryana government to fulfill its elections promises, including raising old age pension, providing foodgrain at Rs 1 per kg to BPL families given the "precarious" financial position of the state, he said.

"The first challenge for the new government in Haryana will be to mobilise additional resources required to meet expenditure on account of promises made by the outgoing government," S S Sangwan, a senior economist at the Centre for Research in Rural and Industrial Development (CRRID), told PTI today.

Ahead of assembly polls, Bhupinder Singh Hooda led previous Haryana government had announced several "fund exhausting" decisions including raising old age pension from Rs 1,000 per month to Rs 1,500 per month, pay scales of Haryana police on par with that of Punjab police and implementation of pay scales of government employees, putting an addition financial burden of Rs 3,000 crore on state exchequer.

"There financial burden of announcements made by outgoing government could be in the range of Rs 2,000 to Rs 3,000 crore," said Sangwan.

BJP in its election manifesto had announced to raise old-age pension to Rs 2,000 a month, food grain at Re 1 per kg to BPL families, Rs 6,000 stipend for class XII pass unemployed youths and Rs 9,000 per month to unemployed graduates for 100 hours of part-time work, laptops for "brilliant" students of class X and class XII, round the clock power, etc.

Haryana projected revenue deficit of Rs 5,013 crore for 2014-15, thrice of what it was in 2011-12, though the former Haryana Finance Minister H S Chattha had blamed non-disbursal of Central sales tax arrears of more than Rs 7,000 crore from the Centre for growing deficit.

As per Fiscal Responsibility and Budgetary Management (FRBM) Act 2005, the existing revenue deficit should have been zero.

Notably, Haryana remained a revenue surplus state for a period starting from 2005-06 till 2007-08.

Significantly, Haryana's debt burden grew by over 200 per cent to Rs 81,806 crore (Budget Estimates for (2014-15) since 2005-06.

The debt burden of the state stood at Rs 26,268 crore in 2005-06 which went up to Rs 39,332 crore in 2009-10. In the following years, the debt burden of the state stood at Rs 46,443 crore in 2010-11, Rs 50,688 crore in 2011-12 and Rs 60,159 crore in 2012-13.

Sangwan said the new government in the state would have to look at rationaslising power subsidy which has reached Rs 5,500 crore at present. In addition to it, the new regime should also curb power theft which could generate fund to the tune of Rs 1,500-2,000 crore to state exchequer.

The economist CRRID, an autonomous research institute, also suggested for relocating administrative offices in backward areas of the state to push development work and generate employment opportunities to achieve inclusive growth in the state.