Himachal Pradesh adopts fiscal prudence: Salaries to be paid on 5th and pensions on 10th of each month

PTC News Desk: In a significant development, Chief Minister Sukhvinder Singh Sukhu announced on Wednesday that salaries for state employees and pensions for retirees will now be disbursed on a staggered schedule due to the ongoing financial challenges facing the state. Under the new arrangement, employee salaries will be paid on the 5th of each month, while pensions will be disbursed on the 10th.

This measure is part of the government’s fiscal prudence strategy aimed at addressing the severe financial crisis.

Responding to concerns about delayed salaries raised by Leader of Opposition Jai Ram Thakur in the Vidhan Sabha, CM Sukhu confirmed that employees would receive their salaries on September 5, and retirees would receive their pensions on September 10. He emphasised that this staggered payment schedule would not impact employees and pensioners of state boards and corporations, as these entities manage their expenditures independently.

The Chief Minister assured that the government would consider the concerns of employees regarding the timely payment of their loan EMIs. By deferring the payment of salaries and pensions, the government anticipates saving approximately Rs 3 crore per month, which translates to an annual saving of Rs 36 crore in interest payments on loans.

Sukhu explained that this strategy is part of broader fiscal measures to align expenditure with revenue, aiming to reduce the substantial interest payments on loans. The state currently incurs a monthly expenditure of Rs 1,200 crore on salaries and Rs 800 crore on pensions, totaling Rs 2,000 crore each month.

The delay in payments is attributed to the need to conserve funds that would otherwise be used to cover interest on loans. Salaries and pensions are scheduled for the beginning of each month, while the Rs 520 crore revenue deficit grant (RDG) is received on the 6th of each month. To cover the immediate salary payments, the government has to raise loans at an interest rate of 7.5 per cent.

CM Sukhu also took the opportunity to criticise previous administrations for their handling of state finances. Referring obliquely to the previous BJP government, he remarked, “Today, people who took anti-employees decisions are posing as pro-employees. The state will be self-reliant by 2027.”

He highlighted that upon taking office on December 11, 2022, his government inherited a financial crisis. The current administration is focused on making Himachal Pradesh self-reliant and improving financial discipline.

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Sukhu questioned the previous government’s decisions, noting that despite a revenue surplus in 2021, the BJP administration deferred Rs 10,000 crore in DA and arrears. He criticized the previous regime for leaving behind a liability of Rs 2,200 crore while focusing on providing free water and establishing 600 new institutions. His administration is committed to fiscal discipline to enhance the state’s financial health.

In a Point of Order, Leader of Opposition Jai Ram Thakur expressed frustration over the delayed salaries and pensions, urging a debate in the house to clarify the financial situation and ensure employees are informed about when they will receive their payments. Thakur argued that the current government should not blame the previous administration for the financial crisis and suggested examining the trend of loan-raising that began in 1993.

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