Himachal Pradesh govt facing acute financial crunch; MLAs have to wait for funds, hiked salaries: CM Sukhu

Himachal Pradesh MLAs shall have to wait for release of the third installment of local area development fund and their enhanced salaries and allowances as the state is facing acute financial crisis, Chief Minister Sukhvinder Singh Sukhu told the state Assembly on Monday.

Replying to a Point of Order on the non-release of MLAs' Local Area Development Fund (LADF) raised by Leader of the Opposition, Jai Ram Thakur, Sukhu said that while LADF is the privilege of the MLAs, the government is not in a position to release the third installment as its financial resources are limited.

The chief minister said he was aware of the MLAs' concern, but since funds are a problem, the MLAs might not get the enhanced salary and allowances this month as well.


Himachal Pradesh is the only state where MLAs are paying income tax, water and other charges, Sukhu said, adding that the third installment of MLA LADF can be released if the state gets financial assistance from the Centre.

Sukhu said the Centre has slashed the Revenue Deficit Grant of Himachal Pradesh from Rs 11,000 crore to Rs 3,200 crore. After Himachal Pradesh implemented the Old Pension Scheme (OPS), the Centre has lowered the state's borrowing limit to Rs 4,800 crore, and another grant of Rs 1,600 crore has also been stopped, he said.

Sukhu said the state government has prudently cut all non-essential expenditure so that it can continue to pay salaries and pensions.

He said the state government had raised the issue of cut in grants and loan limits with the Centre, but Union Finance Minister Nirmala Sitaraman asked why the state government has revived the OPS when it was being stopped in other states.

Sukhu said he had raised the issues with the Central Finance Commission as well, but there was not much hope considering the increase in the state's per capita income.

Jai Ram Thakur, raising the Point of Order, said that the government has so far released two installments of MLA LADF but not according to the recommendations of the MLAs. He pointed out that only Rs 24.50 lakh, out of the Rs 71.96 lakh, has been released in his constituency, Seraj.

Thakur urged the government to immediately release the funds.

The BJP MLAs also staged a dharna in the Assembly complex to press for release of the local area development fund.