Rajasthan CM Confronts Dire Financial Crunch

Rajasthan is reeling under a huge financial burden with the state's debt having gone beyond Rs 5.59 lakh crores.
Rajasthan has increased expenditure on education by 203.4 percent, by 105.4 percent on health, by 227.14 percent on housing.
Its expenditure on social welfare schemes has increased by almost 2,475 per cent.

Rajasthan, which is reeling under a resource crunch, has ordered freezing of all financial sanctions till further orders.

The order has not stated any time span, but the order will hit a number of key projects planned by the erstwhile Ashok Gehlot government.

The Bhajanlal Sharma government is keen to review the mega projects planned by the Gehlot government -- drinking water (the Jal Jeevan Mission), rural roads, electricity supply companies owned by the state government.

The Jal Jeevan Mission was probed by the Enforcement Directorate following allegations of corruption.

The government order signed by Additional Chief Secretary (finance) Akhil Arora directed all departments to stall tenders and related work.

This embargo applies to all work whose detailed project report was duly completed and were given financial sanctions after tenders.

The finance department's order states that no new tender process should be initiated and all such tenders which are being processed should be held in abeyance till further orders.

Rajasthan is reeling under a huge financial burden with the state's debt having gone beyond Rs 5.59 lakh crores.

The Bhajanlal Sharma government, which partially reviewed the state's financial status, decided to reduce capital expenditure and adopt austerity measures to deal with the financial crunch.

Six lakh state government employees are worried over the Old Pension Scheme (OPS) which was assured by the Gehlot government.

Gehlot promised the state electorate that if the Congress was voted back to power it would bring in legislation making it mandatory for future state governments to ensure the old pension schemes for government employees.

Chief Minister Sharma has been evading the media's questions on this issue, only saying that his government will review it.

"Our fear is that the BJP government would overturn the Gehlot government's decision and introduce the New Pension (NPS) as formulated by the Union government. The then state government had enforced the NPS in 2004, but the Gehlot government earlier this year ordered that it would give the employees the benefit of the OPS," says Upendra Sharma, general secretary of the Rajasthan Shikshak Sangh.

"The BJP government, it seems, is hell-bent on the NPS which will harm the interest of 500,000 state government employees, apart from some 125,000 employees serving various boards and corporations," Sharma adds.

Rajasthan was the first state to provide the benefits of the OPS to its government employees. Himachal Pradesh, Punjab, Chhattisgarh and Jharkhand followed suit.

Under the OPS, an employee on completion of 10 years of service with the state government is entitled to a proportionate minimum pension of Rs 8,500 per month. Under the NPS, which is linked to the market, no such guarantees are assured. In one case a retired government employee received Rs 148 per month as pension under the NPS.

According to a senior state finance department official, the Rajasthan government's expenditure far exceeds the revenue it earns.

Though the tax collections increased by 4.4 per cent, a large chunk of this revenue is spent on paying interest on loans.

Rajasthan increased its expenditure on social welfare and social justice schemes by almost 24 percent.

A Reserve Bank of India report states that the state salary bill has increased by 30.75 percent.

Rajasthan has increased expenditure on education by 203.4 percent, by 105.4 percent on health, by 227.14 percent on housing. Its expenditure on social welfare schemes has increased by almost 2,475 per cent.

Chief Minister Sharma said his government is committed to implementing all the 59 promises his Bharatiya Janata Party made in its election manifesto. The main focus of his government, Sharma said, would be benefitting the farmers on the minimum support price on purchase which would be topped by a bonus.

It would provide a gas cylinder at Rs 450, free education to the girl child from kindergarten to post graduation, employment to 250,000 youth and various other schemes.

But there is no assurance on the pension scheme, which is distressing state government employees.

Various welfare schemes promised by the BJP are almost the same that were offered by the Congress government.

The Gehlot government's flagship scheme -- the Chiranjeevi Beema Yojana which guaranteed medical insurance cover up to Rs 25 lakh -- will be scrapped and instead be called Ayushman Bharat Yojana which provides Rs 5 lakh medical coverage.

Sharma says all those who registered under the Chiranjeev Beema Yojana will continue to get those benefits under the Ayushman Beema Yojana; the state will provide Rs 25 lakh medical insurance.

The chief minister wants to expand his cabinet and prepare to face the assembly in January, but before that he wants to shuffle the senior bureaucracy.

Feature Presentation: Rajesh Alva/Rediff.com