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HP FRMB (Amendment) Bill 2021: Raising Borrowing Limit Would Lead Himachal into Debt Trap, Will Damage Federal Structure, Says Opposition

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HP FRMB (Amendment) 2021 Bill

Shimla-Himachal Pradesh Fiscal Responsibility and Budget Management (FRMB) (Amendment Bill, 2021, was passed in State Vidhan Sabha on March 18, 2021, after a heated debate between the ruling government and the opposition that was followed by a walkout.

Opposition Congress and lone legislator from CPI (M), Rakesh Singha, opposed the Bill. They alleged that the government has no planning regarding managing state’s finances and dependents upon borrowings only. 

According to the State Government, the Bill was introduced and passed to regularize excess borrowings in the year 2019-20. Previously, the state government could only borrow three percent of the gross state domestic product (GSDP), but after this amendment, this borrowing limit was raised allowing the state government to borrow upto five percent of the GSDP.

The opposition leader Mukesh Agnihotri and CPI(M) MLA Rakesh Singha insisted that it was a very delicate matter that is bound to have serious financial implications for the people of the state. They insisted that this Bill should first be sent to the Select Committee for detailed discussion before passing it.

“If the financial condition was so poor, then the state government should have mentioned in the Budget that it would generate resources through taxes,” Agnihotri said.

He said that this will go down as a black day in the history of the state. He argued that instead of fighting for its share from the Centre, the state government is covering up the fault of the Centre. He also said that the state government was already warned by the CAG in 2018 of the violations of the borrowing limits but it did not act then.

“Passing of this Bill would lead Himachal Pradesh into a debt trap and the state won’t be able to come out of it,” Rakesh Singha said.

“This Bill is an attack on the federal structure of the state,” he said.

Opposition and Singha argued that if this Bill is passed then the interest liability on the post-2022 borrowings would rise and Himachal Pradesh doesn’t have sufficient tax-based resources to repay this liability.

“When the GST was introduced then state governments and Centre government had reached an agreement that compensation at the rate of 14% would be given to the state for the 2017-22 period. The government had also imposed Central cess of various kinds, Singha said.

“However, now the states are being told to borrow as Centre had backtracked from providing the agreed compensation,” he added.

More borrowing would lead to more liabilities including interest-liability, he said, asking as to how the state plans to pay it back.

“I want to appeal that this Bill would have serious implication, therefore, send it to the Select Committee and the Cabinet for detailed debate,” he said.

There is only one solution to it, he said.

“Take your entire Cabinet to the Government of India and request it not to impose it on the State Government. Let the Central Government borrow this money,” Singha said.  The opposition leader Agnihotri also supported Singha and said the opposition legislators would support the state government in doing so.

Moving on to the second objection, Singha quoted the sixth line of the Statements of Objects and Reasons.

“In addition, the State of Himachal Pradesh received one-time receipts from the Union Government on account of its share of Compensatory Afforestation Fund Management and Planning Authority (CAMPA) Funds credited in the Public Accounts, which is included in the public debt of the State,” he quoted from the Bill

He argued that the funds being given to the State for the protection of its own forests can’t be treated as a debt in the account of the State.

The Urban Development Minister Suresh Bhardwaj insisted that the Bills is introduced to regularize an anomaly caused by borrowings of the previous Congress government.

Bhardwaj tried to justify the Bill blaming then Congress government for violation of borrowing limits in the years 2012-13, 2013-14, and 2014-15. He also insisted that it was just a one-time relaxation for the year 2019-20.

Bhardwaj quoted the Bill,

“Provided that the fiscal deficit may exceed the level of 3 per cent but shall not exceed 5 per cent of the estimated Gross State Domestic Product in the Financial Year 20919- 2020.”

In 2013, State’s fiscal deficit was Rs 2978 crores – 3.6 percent, 2012 crores in 2013-14 – 4.23 percent and Rs 4200 crores in 2014-15 – 4.05 percent. The Bills is meant to regularize exceeded limits of borrowings in these years too, Bhardwaj argued.

He also said that the revenue collection of Centre under Goods Services Tax (GST) was low due to the pandemic in the said year due to which the state couldn’t get the share committed by the Centre. Bhardwaj also said that the borrowings increased in 2019-20 as funds of Rs 1600 crores received under the Compensatory Afforestation Fund Management and Planning Authority (CAMPA) were also counted as public debt.

He added that the Statement of Objects and Reasons clearly says “The actual receipts of Central taxes decline during 2019-20 due to which share of States also got affected.”

Following a heated argument, the Bill was passed in the absence of legislators who had walked out in protest against it. 

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HP Cabinet Decisions Jan 14, 2022: No New Covid Restrictions, Nod to Tax Waiver for Transporters & Other Decisions

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HP Cabinet Decisions January 14, 2022

Shimla-A meeting of the Himachal Pradesh Cabinet was held on January 14, 2022. It was expected that the state government could take a decision on imposing more Covid-19 restriction considering the sudden surge in daily new cases, however no such decision was taken. 

The Cabinet took various decisions including a nod to dispense with the process of 15 marks evaluation and enhancement of weightage of written test from 85 to 100 marks for direct recruitment to Class-III posts.

Tax Waivers for Transporters

The Cabinet gave its ex post facto approval for 100 percent waiver/ exemption of Token Tax, Special Road Tax and Passenger Tax of various categories of vehicles to provide relief to the transporters keeping in view the effect due to corona pandemic.

HP Cabinet decided to waive of remaining 50 percent Token Tax on Stage Carriage, Taxi, Maxi, Auto and Contract Carriage buses, Institutional Buses and 100 percent Token Tax on Contract Carriage Buses and Special Road Tax on Stage Carriage with effect from 1st August 2020 to 30th June 2021. I

The Cabinet also decided to waive off 100 percent Token Tax on Stage Carriage, Contract Carriage and Institutional Buses and Special Road Tax of Stage Carriage with effect from 1st July 2021 to 30th November 2021.

It also decided to waive off 100 passenger tax on contract carriage and institutional buses with effect from 1st April 2020 to 30th November 2021.

The HP Cabinet gave its approval for restructuring of State Taxes and Excise Department. Creation and filling up of posts would be carried out by the Department in a phased manner in consultation with the Finance Department and sync with the restructuring proposal.

The Cabinet gave its approval to fill up 108 posts of different categories in the Revenue Department on a contract basis.

The Cabinet decided to fill up 42 posts of Silk Inspectors in the Industries Department on a contract basis.

The Cabinet decided to fill up 13 posts of different categories in the Printing and Stationery Department.

It decided to fill up three posts of Statistical Assistant in Revenue Department on contract basis.

Relief to Flood Affected Farmers of Lahaul-Spiti

The Cabinet gave its nod to provide relief to flood-affected farmers of Lahaul-Spiti district for current agriculture and horticulture losses caused due to extensive rains on 27th to 30th July last year. The farmers would be provided Rs.2000 per bigha for losses between 25 to 50 percent, Rs. 2500 per bigha for losses between 50 to 75 percent and Rs. 3000 per bigha for losses to agricultural and horticultural crops above 75 percent. Rs. 3000 per bigha would also be provided to farmers for losses to their lands caused due to landslides/flash floods/avalanches etc. and Rs. 1000 per bigha would be provided for the desilting of agricultural and horticultural lands. 

It also gave planning permission for the construction of the PHC building between Lions Club and Housing Block No. 46 in Sector 6 New Shimla with relaxation beyond permissible norms in the public interest.

HP Swaran Jayanti Energy Policy-2021

HP Swaran Jayanti Energy Policy-2021 for clean and green energy development through expeditious of full energy potential especially hydro and solar. The Government aims to add 10000 MW of green energy through hydro, solar and other green energy sources by 2030 and the development of green energy sources

It also aimed at developing a transmission Master Plan to facilitate planning and timely execution of hydro and solar projects. It also lays stress on renewal energy sources viz. solar, wind, biomass and other non-conventional energy sources.

HP Swarnim Jayanti Sports Policy 2021

The Cabinet gave its approval to the Himachal Pradesh Swarnim Jayanti Sports Policy 2021 to develop and maintain sports infrastructure, encourage public-private participation in creating sports infrastructure, coordinate with educational institutions for the promotion of sports and to encourage, train and support sportspersons for participation and excellence in national and international championships with high standards of ethics. 

 

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Covid Restrictions Increase as Himachal Reports a Big Spike With 1200 New Cases in 24 Hours

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covid restrictions in himachal pradesh 2022

Shimla-Himachal Pradesh is witnessing a sudden spike in the number of daily Covid-19 positive cases as warned by the health experts and the government. In a span of eight days, the rate of new cases has jumped to more than double.

On Monday, of the total 9942 samples tested for Covid-19, 1200 were found to be positive with two Covid-19 deaths.  This number was below 500 on Sunday.

The surge has come ahead of the `warning of the third wave which is expected to peak by the March-end.

The state government has begun to increase restrictions as a precautionary measure. But the most crucial measure – restrictions on visitors from outside the state- is yet to be attended. Currently, Hill state is reporting a huge footfall of tourists due to snowfall. All tourist destinations are crowded with tourists as it’s the peak season. The imposition of restrictions on visitors would affect the tourism industry.

Also Read: HP Govt Closes Educational Institutes in State in Wake of Surge in Daily Covid-19 Cases

The HP Government has already imposed a night curfew, closed all educational institutes, banned all social and religious gatherings and imposed conditions on the number of people for those which have been allowed, shifted to a 5-day week for the government offices with only 50% attendance. Further, timings of the opening of the markets/shops have also been modified. However, these restrictions wouldn’t apply to chemists/medical stores. These restrictions would remain in force till January 26, 2022. 

Also Read: HP Govt Offices to Operate 5-Days a Week with 50% Attendance, Ban on Social and Religious Gatherings

In the Shimla district, the shops/markets would be allowed to open between 10 am to 7 pm.  However, motor mechanics are allowed to remain open till 11 pm. Similarly, restaurants can remain open till 10 pm, and those located along the National Highways till 11 pm.

In the Una district, all shops/markets except some would be allowed to open only till 6:30 pm and will remain closed on Saturday.

The district administration of Hamirpur has decided this timing to be between 6 am to 6 pm. The markets would remain closed on Saturday and Sunday except for those selling essentials.

For the Kullu district, shops/markets would remain open till 6: 30 pm and 6 pm in Solan. Similarly, administrations of respective districts have the liberty to create their roaster for these timings.

The return of these restrictions to the state and the warning of more daily cases during the next couple of months is causing a panic in the public, worsened by speculations of a possible lockdown in stock.

 

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HP Govt Offices to Operate 5-Days a Week with 50% Attendance, Ban on Social and Religious Gatherings

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hp govt office timing 2022

Shimla-Himachal Pradesh Government offices, including PSUs, local bodies, and HP Secretariat, will operate five days a week with only 50% attendance from Monday, said a notification released on January 9, 2022. These orders would remain in effect till January 24, 2022.

According to the state government, the measure was taken in wake of the sharp rise in Covid-19 cases recently.

However, if required, the district administrations can deploy any government employee for duties related to vaccination, surveillance, monitoring of persons under home isolation, manning the check posts, making data entry or monitoring, calling home isolated patients etc.

These offices would remain closed on Saturdays and Sundays. However, these restrictions would not apply to offices handling emergencies or essential services – health, police, fire, banks, electricity, water and sanitation, public transport, telecom, excise, budget etc.

All social and religious gatherings have been completely banned till January 24.  However, other gatherings, including political, academic, sports, entertainment, and cultural, would be allowed with the condition of 50% indoor/outdoor capacity. A maximum of 100 persons would be allowed indoors and 300 persons outdoors. Prior permission would have to be obtained from the respective district administrations before organizing any event in the allowed categories.

At religious places or places of worship, a complete ban would remain in force on langars, community kitchens, dhaams (public feasts) across Himachal Pradesh.

The notification said that respective district administrations would be responsible for deciding the timing of opening and closing of markets/shops in their districts.

HP Government has already decided to keep all educational institutes, except Medical, Dental and Nursing Colleges, closed till 26th January. A night curfew from 10 pm to 6 am is already in force.

Also Read: HP Govt Closes Educational Institutes in State in Wake of Surge in Daily Covid-19 Cases

However, no restrictions have been imposed on the movement of visitors to the state. Currently, the tourism industry of the state is in its peak season due to snowfall, causing overcrowding at tourist destinations.

Unfortunately, the compliance with Covid protocols as given by the state and centre governments is quite low, especially with tourists thronging the state in a large number.

 Further, Chief Minister Jairam Thakur has also cancelled his public meetings/events till January 15. He has urged the public to comply with Covid-related guidelines.

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