The Comptroller and Auditor General (CAG) has expressed concern over the financial burden of the Old Pension Scheme (OPS) on Himachal Pradesh, warning that future fiscal implications must be considered while assessing the state’s debt sustainability. The CAG’s 2023-24 financial report was tabled in the assembly by Deputy Chief Minister Mukesh Agnihotri on Friday.
The state government restored the Old Pension Scheme from April 1, 2023, but the CAG noted that no separate pension fund has been created to handle the anticipated financial impact and fiscal burden on the state treasury. The expenses will be met from the state’s own resources, with contributions held with the Government of India and PFRDA also being utilized for partial fulfillment of future pension liabilities.
Himachal Pradesh recorded a massive revenue deficit of ₹5,558.59 crore in 2023-24, compared to ₹6,336 crore in the previous year. The state received revenue deficit grants of ₹8,058 crore in 2023-24 and ₹9,377 crore in 2022-23. The fiscal deficit remained at high levels of ₹11,266 crore in 2023-24 and ₹12,380 crore in 2022-23.
The fiscal deficit increased from ₹5,597.06 crore (3.52% of GSDP) in 2019-20 to 5.43% of GSDP in 2023-24, indicating mounting fiscal pressure. Revenue expenditure grew from ₹30,730.43 crore (19.31% of GSDP) in 2019-20 to ₹44,731.63 crore (21.56% of GSDP) in 2023-24, maintaining 85-89% of total expenditure throughout this period.
Subsidies under non-committed expenditure increased from ₹1,067.78 crore in 2019-20 to ₹1,768.35 crore in 2023-24, with electricity subsidies accounting for 35-53% of total subsidies during this period. The state government provided guarantees worth ₹731.09 crore on borrowings in 2023-24.
The CAG report highlighted that 15 cases involving embezzlement, loss, and theft worth ₹38.39 lakh remain pending as of March 31, 2024. During 2023-24, 15 cases worth ₹11.17 lakh were settled, but no new cases were registered. The report noted that 80% of the pending cases relate to misuse and loss of government materials, while 20% involve theft cases.
Revenue receipts grew from ₹30,742.41 crore to ₹39,173.04 crore between 2019-20 and 2023-24, showing an average annual growth rate of 4.92%. However, the share of grants in revenue receipts ranged between 38.14% and 55.06%, indicating heavy dependence on central government assistance.
The state spent only ₹5,629.79 crore on capital account in 2023-24, which was just 11.16% of total expenditure and merely 37.78% of total borrowings. Capital receipts, including public debt, increased from ₹4,169.72 crore to ₹7,035.23 crore during the review period.
A significant concern raised by the CAG was that various departments failed to submit utilization certificates for ₹2,795.23 crore worth of different schemes. A total of 2,990 utilization certificates spanning from 2017-18 to 2022-23 remain pending, raising questions about fund utilization and accountability.
The CAG concluded that continuous imbalance between receipts and expenditure, along with increasing trends in debt repayment and guarantees, has put Himachal Pradesh’s finances under stress, creating risks for achieving debt stabilization and sustainability goals. The auditor recommended that the state government bring accuracy to forecasts while preparing budget estimates.
