Shimla
During the state assembly session, Himachal Pradesh Chief Minister Sukhwinder Singh Sukhu announced that the decision to defer the payment of salaries to employees until the 5th and pensions until the 10th of every month will save Rs 36 crore annually. He explained that this measure was necessary to avoid taking out short-term loans, which the state government has to secure for five days every month to release salaries on the first day.
Giving a statement on the matter in the state assembly on Wednesday CM Sukhu clarified that the decision stems from the timing of the central government’s remittance of the Rs 520 Cr as Revenue Deficit Grant (RDG) and Rs 740 Cr as share in Central Taxes respectively released on 6th and 10th of each month.
To release salaries on the 1st of every month, the government would need to borrow Rs 40 crore at an interest rate of 7.50% for the five-day gap, which results in an annual financial burden of Rs 36 crore.
Sukhu assured the assembly that the decision is not indicative of a financial crisis but a step towards fiscal prudence. He underscored the need to streamline the state’s expenditure and revenue processes, noting that this decision, is part of the government’s efforts to ensure fiscal prudence and optimize financial management.
Sukhu emphasized that the revised schedule for salary and pension disbursements would not affect autonomous bodies like the Himachal Road Transport Corporation (HRTC) and the State Electricity Board, which will continue to pay their employees on the 1st of each month.
According to him, a monthly expenditure of Rs 1,200 crore on employee salaries and Rs 800 crore on pensions amounts to Rs 24,000 crore annually, and by avoiding unnecessary short-term loans, the state can save Rs 3 (2.85) crore in interest every month.
Responding to concerns raised by state employees about their EMIs being due on the 1st of the month, Sukhu mentioned that the government would consider adjusting norms for affected employees to mitigate their issues. He added that the funds saved through this fiscal management would be redirected to necessary public welfare initiatives.
In response to the Leader of Opposition Jai Ram Thakur, who questioned the delayed payments, Sukhu refuted claims of a financial crisis and accused the
