1. HIMACHAL PRADESH ECONOMY AND FINANCIAL PROFILE: REVENUE MANAGEMENT AND FRBM COMPLIANCE AKSHAY SOOD SPECIAL SECY (FIN) & ADVISER (PLANNING)

2. State Demographic Profile
Particulars HP
All India
Population (Crore) (Census 2011)
0.69
121.05
Decennial Growth Rate(%)
12.95
17.68
Population Density per sq. km.
123(2D)
79(3D)
382
Sex Ratio (Females per 1000 males)
972
943
% of Rural Population
90.00
68.84
Literacy Rate
82.80
73.0
Life Expectancy ( )
70.0
66.1
Male
67.7
64.6
Female
72.4
Source: Census 2011 & SRS Bulletin

3. STATE FINANCIAL PROFILE
CAGR ( to ) A
of Revenue Receipts
12.98 B
of Tax Revenue
15.13 C
of Non- Tax Revenue
11.32 D
of Total Expenditure
11.80 E
of Capital Expenditure
10.99 F
of Revenue Expenditure on Education
12.80 G
of Revenue Expenditure on Health
10.41 H
of Salary and Wages
13.10 I
of Pension
17.08
Gross State Domestic Product (GSDP) ,585
GSDP CAGR ( to )

4. Trends in Gross State Domestic Product (GSDP)
Gross State Domestic Product (In crore)
48,189
57,452
64,957
73,710
82,585
Growth rate of GSDP (In per cent)
16.16
19.22
13.06
12.88
12.04
Source: Economic and Statistics Department, Himachal Pradesh
and Central Statistics Office

5. Comparative Growth Rate of H.P. and National Economy
Plan Period
Average Annual Growth Rate of
Economy at Constant Prices
Himachal Pradesh
All India 1. 2. 3.
(+) 8.1
(+) 8.6
(+) 8.8
(+) 8.9
(+) 7.3
(+) 6.7
(+) 6.1
(+) 4.5
(+) 6.2
(+) 4.9

6. Movement of Per Capita Income Per Capita Income (In Rs.)
Year
Per Capita Income (In Rs.)
(At Constant Prices)
Himachal
All India 1. 2. 3.
43492
34442
46682
36924
(P)
49203
40479
(Q)
51730
41828
(A)
54494
44233

7. Percentage Contribution of Sectoral State Domestic Product at Current Prices
Year
Primary
Secondary
Tertiary
58.56
16.73
24.71
19.75
36.50
43.75

8. Structure of the Economy
percent
Secondary sector contributes 41% to the State GSDP whereas it employs only 1.65% of the total workers. In contrast, primary sector contributes 19 per cent to the State GSDP & 63 % workers are dependent on this sector.

9. Total receipts (Rs. 20,851 crore)
Revenue Receipts
(Rs. 15,711 crore)
Capital Receipts
(Rs. 4,067 crore)
Net Public Account Receipts*
(Rs. 1,073 crore)
Remittances
(Rs.(-) 23 crore)
Small Savings and Provident Funds (Rs. 887 crore)
Deposits and advances
(Rs. 207 crore)
Suspense and Misc.
(Rs. One crore)
Reserve Fund
Tax Revenue (Rs. 5,121 Crore)
Non-Tax Revenue (Rs. 1,785 Crore)
State share of union taxes and duties (Rs. 2,491 crore)
Grant in aid from GoI (Rs. 6,314 crore)
Debit Receipts (Rs. 4,050 crore)
Non dedit receipts / Recovery of loans and advances (Rs. 17 crore)
Tax on sales Trade etc.
(Rs. 3,141 Crore)
State Excise(Rs.952 crore)
Taxes & duties on Electricity(Rs. 191 Crore)
Taxes on Vehicles
(Rs. 208 Crore)
Stamps & Registration fees (Rs. 188 Crore)
Others
(Rs. 441 Crore)
Market Loans and Borrowings (Rs. 3,362 crore)
Ways and Means Advances and Overdrafts (Rs. 629 crore)
Loans & Advances from GoI (Rs. 59 crore)

10. RECEIPT COMPOSITION
Total Receipts Rs. 20,851 Crore

11. REVENUE RECEIPT COMPOSITION -2013-14
Total Revenue Receipts-Rs 15,711 Crore

12. Trends in Revenue Receipts relative to GSDP
Revenue receipts(RR)
(Rs.in crore)
10,346
12,711
14,543
15,598
15,711
Rate of growth of RR
(per cent)
11.15
22.86
14.41
7.25
0.72
RR/GSDP (per cent)
21.47
22.12
22.39
21.16
19.02
Buoyancy Ratios
Revenue Buoyancy w.r.t GSDP
0.69
1.19
1.10
0.56
0.06
State’s Own Taxes Buoyancy w.r.t GSDP
1.17
0.98
(-)0.03
1.25
Revenue Buoyancy with reference to State’s own taxes
1.23
1.02
1.12
(-)21.97
0.05

13. Growth rate of Non-Tax Revenue (NTR)
(Rs. In Crore)
Revenue Head
Interest receipts
77 (-1)
70 (-9)
115 (64)
70 (-39)
119 (70)
Dividends & profits
74 (-17)
64(-14)
86 (34)
100 (16)
103 3)
Other non-tax receipts of which
1,633 (3)
1,561(-4)
1,714 (10)
1,207 (-30)
1,563 (29)
Misc. General Services
1 (-80)
2 (50)
40 (1900)
9 (-78)
6 (-33)
Education, Sports, Arts and Culture
84 (47)
82 (-2)
104 (27)
112 (8)
157 (40)
Forestry and Wild life
72 (31)
65 (-10)
107 (65)
64 (-40)
358 (459)
Other Administrative Services
17 (21)
31 (82)
26 (-16)
46 (77)
26 (-43)
Public Works
31 (35)
35 (13)
42 (20)
40 (-15)
35 (-13)
Water Supply and Sanitation
20 (11)
26 (30)
31 (19)
34 (10)
37 (9)
Others
1,408 (-1)
1,320 (-6)
1,364 (3)
902 (-34)
944 (5)
Total
1,784 (2)
1,695 (-5)
1,915 (13)
1,377 (-28)
1,785 (30)
Figures in the parenthesis indicate percentage growth/deficit over the previous year

14. Grants-in-aid from GoI
(Rs. In Crore)
Particulars
Non-Plan Grants
2,052
2,634
2,647
2,526
2,025
Grants for State Plan Schmes
2,731
2,680
3.342
4,179
3,765
Grants for Central Plan Schemes 5 1 27 28 17
Grants for Centrally Sponsored Plan Schemes
339
343
505
580
507
Total
5,127
5,658
6,521
7,313
6,314
Percentage of increase over previous
14.64
10.36
15.25
12.15
(-) 13.66
Percentage of Revenue Receipts 50 45 47 40

15. Fiscal Responsibility and Budgetary Management (FRBM) Act.
Himachal Pradesh FRBM Act 2005 and FRBM Rules 2005 were framed to make the State Government accountable for ensuring prudence in fiscal management and to ensure fiscal stability, sustainable debt management consistent with fiscal stability and greater transparency.
The medium term Fiscal Statement and Fiscal policy Strategy Statement set forth the fiscal objectives, strategic priorities of the State Govt. and three-year rolling target for fiscal management.
An Act to achieve Revenue Surplus.
Prudential debt policies.
Transparency in Fiscal Management.

16. Achievement Under FRBM ACT
Parameters of FRBM
Fiscal Indicator
Achievement
1. Revenue Deficit
Revenue Deficit/ Surplus as percentage of Revenue Receipt
-8.13
0.20
2. Fiscal Deficit
Fiscal deficit as percentage of Gross State Domestic Product.
-4.01
-2.91
3. Outstanding Debt
Total outstanding Debt as percentage of Gross State Domestic Product.
36.54
33.83
4. Risk Weighted Guarantees
Total outstanding Guarantees as percentage of Revenue Receipts
23.30
18.72

17. Experience of FRBM Act Implementation
Still limited awareness of the Act.
Art. 293 ceiling by Government of India has been an effective tool for GoI to ensure debt sustainability.
No cap on Government Guarantees.
Off Budget borrowings.
Limited Legislative Scrutiny.
Shifting of Goal Post .Act amended in 2011 to eliminate Revenue deficit by
Independent Mechanism was to be set up to Review Fiscal reform path.

18. Experience of FRBM Act Implementation ……..Continued
Non compliance of section 5 of the Act.
Special provision allows Government to breach Revenue/ Fiscal deficit together.
No Judicial intervention/PIL.
No provision to penalize Government.
Mostly an indicative Financial Legislation.

19. Fiscal Indicators- Rolling Targets
(Rs. In Crore)
Fiscal Indicator
Current year Revised Estimates
Ensuing year Target Budget Estimates Y
Target for next three years
Y+1
Y+2
Y+3 1.
Revenue Receipts 2.
Revenue Expenditure 3.
Revenue Deficit/ Surplus as percentage of Revenue Receipts
-8.13
0.20
0.27
0.15
0.21 4.
Fiscal deficit as percentage of Gross State Domestic Product.
-4.01
-2.91
-2.83
-2.81
-2.80 5.
Tax revenue as percentage of Gross State Domestic Product.
5.96
5.61
5.48
5.35
5.23 6.
Total outstanding Debt as percentage of Gross State Domestic Product.
36.54
33.83
32.56
31.43
30.42 7.
Total outstanding Guarantees as percentage of Revenue Receipts
23.30
18.72
State Government would try to keep this at the level of B.E in future. 8.
Gross State Domestic Product.
95587
112934
128508
146229
166394

20. (Rs. In Crore) Time Series Data on HP Finances Part-A: Receipts
1. Revenue Receipts
10,346
12,711
14,543
15598
15711
(i) Tax Revenue
2,574 (25)
3,643 (29)
1,108(28)
4,626(30)
5,121(33)
Taxes on Sales, Trade, etc.
1,487 (58)
2,101 (58)
2,477(60)
2,728(59)
3,141(61)
State Excise
500 (19)
562 (15)
707(17)
810(18)
952(19)
Taxes on vehicles
134( 5)
163 (4)
176(4)
196(4)
208(4)
Stamps and Registration fees
113 (4)
133 (4)
155(4)
173(4)
188(4)
Taxes and Duties on electricity
39 (2)
302 (8)
185(5)
262(6)
191(4)
Land Revenue
15 (1)
5 (0.1)
18(11)
24(-)
10(-)
Taxes on Goods and Passengers
89 (3)
93 (3)
94(2)
101(2)
105(2)
Other Taxes
197 (8)
284 (8)
296(7)
332(7)
326(6)
(ii) Non Tax Revenue
1,784 (17)
1,695 (13)
1,915(13)
1,377(9)
1,785(11)
(iii) State’s share of Union taxes and duties
862 (8)
1,715 (13)
1,999 (14)
2,282 (14)
2,491 (16)
(iv) Grants in aid from Government of India
5,126 (50)
5,658 (45)
6,521 (45)
7,313 (47)
6,314 (40)
2. Miscellaneous Capital Receipts -
646
3. Recoveries of Loans and Advances 34 73 25 21 17
4. Total Revenue and Non debt capital receipts (1+2+3)
10,380
13,430
14,568
15,619
15,728

21. Time Series Data on HP Finances ……. (Continued)
5. Public Debt Receipts
2,553
2,411
1,984
3,371
4,050
Internal Debt (excluding Ways and Means Advances and Overdrafts)
2,484 (97)
2,372(98)
1,904(96)
3,239(96)
3,362
Loans and Advances from Government in India -
629
Net transactions under Ways and Mans advances and overdrafts
69(3) 39
80(4)
132(4) 59
6. Total Receipts in the Consolidated Funds (4+5)
12,933
15,841
16,552
18,990
19,778
7. Contingency Fund Receipts
8. Public Account Receipts
6,821
8,507
9,237
9,146
10,300
9. Total Receipts of the State (6+7+8)
19,754
24,348
25,789
28,136
30,078
Part-B Expenditure / disbursement
10. Revenue Expenditure
11,151
13,946
13,898
16,174
17,352
Plan
1,238(1)0
1,652(12)
1,701(12)
2,079(13)
2,387(14)
Non-Plan
9,913(89)
12,294(88)
12,197(88)
14,095(87)
14,965(86)
General Services
(including interest payments)
4,377(39)
5,279(38)
5,690(41)
6,618(41)
7,047(41)
Social Services
3,902(35)
4,979(35)
5,147(37)
6,131(38)
6,706(39)
Economic Services
2,868(26)
3,682(26)
3,049(22)
3,418(21)
3,590(20)
Grants-in aid and contributions
4(-)
6(-)
12(-)
7(-)
9(-)

22. Time Series Data on HP Finances …. (Continued)
11. Capital Expenditure
1,943
1,789
1,810
1,955
1,856
Plan
1,895(98)
1,774(99)
1,764(97)
1,859(95)
1,815(98)
Non-Plan
48(2)
15(1)
46(3)
96(5)
41(2)
General Services
(including interest payments)
63(3)
73(4)
74(4)
81(4)
Social Services
610(31)
611(34)
372(21)
436(22)
478(26)
Economic Services
1,270(65)
1,105(62)
1,3665(75)
1,445(74)
1,297(70)
12. Disbursement of Loans and Advances 70
227
493
469
531
13. Total ( )
13,164
15,962
16,201
18,598
19,739
14. Repayment of Public Debt
867
870
1,128
2,117
1,704
Internal Debt (excluding Ways and Means Advances and Overdrafts
811
808
1,034
2,056
1,467
Net transactions under Ways and Means Advances and Overdraft -
172
Loans and Advances from GoI 56 62 94 61 65
15. Total disbursement out of Consolidated fund ( )
14,031
16,832
17,329
20,715
21,443

23. Time Series Data on HP Finances…..(Continued)
Part C. Deficits
Revenue Deficit (-)/Revenue Surplus (+) 1-10)
(-) 805
(-) 1,235
(+) 645
(-) 576
(-) 1,641
Fiscal Deficit (-)/Fiscal Surplus (+) (4-13)
(-)2,784
(-) 2,532
(-) 1,633
(-) 2,979
(-)4,011
Primary Deficit (-) Surplus (+) 21+23)
(-) 828
(-) 582
(+) 497
(-) 609
(-) 1,530
Part D: Other data
Ways and Means Advances/ Overdraft -
629
Ways and Means Advances availed (days) 10
Overdraft availed (days) 01
Gross State Domestic Product
48,189
(16.16)
57,452
(19,.22)
64,957
(13.06)
73,710
(12.88)
82,585
(12.04)
Outstanding fiscal liabilities (year end )
23,713
26,415
28,228
30,442
33,884

24. RESOURCE MOBILISATION
Own Tax revenue/GSDP
0.05
0.06
Own Non-Tax Revenue /GSDP
0.04
0.03
0.02
Central Transfers/GSDP

25. IMPORTANT FISCAL INDICATORS
Revenue deficit (surplus)/GSDP
(-) 1.67
(-) 2.14
(+) 0.99
(-) 0.78
(-) 1.99
Fiscal deficit/GSDP
(-) 5.78
(-) 4.41
(-) 2.51
(-) 4.04
(-) 4.86
Primary Deficit (surplus)/GSDP
(-) 1.72
(-) 1.01
(+) 0.77
(-) 0.83
(-) 1.85
Revenue Deficit/Fiscal Deficit
(-) 28.92
(-) 48.78 NA
19.34
40.90
Primary Revenue Balance/GSDP (ratio)
.022
.011
.041
.023
009
Management of Fiscal Liabilities
Fiscal Liabilities/GSDP
0.50
0.46
0.43
0.41
Fiscal Liabilities/RR
2.29
2.07
1.94
1.95
2.16
Primary deficit vis-à-vis quantum spread
(-)0.50
(-) 0.21
0.36
(-)0.44
(-) 1.16

26. IMPORTANT FISCAL INDICATORS…..Continued
Other Fiscal Health Indicators
Return on Investment
73.49
64.11
85.65
100.09
103.42
Balance from Current Revenue (Rs. In crore)
(-) 6442
(-) 2607
(-)1529
(-) 3284
(-) 3544
Financial Assets/ liabilities
0.67
0.66
0.70
0.68
Revenue Expenditure: Basic Parameters
Revenue Expenditure (RE) (Rs. In crore)
11,151
13,946
13,898
16,174
17,352
Rate of Growth (per cent) RE
18.15
25.06
(-) 0.34
16.38
7.28
Non-Plan Revenue Expenditure (NPRE) (Rs. In crore)
9,913
12,294
12,197
14,095
14,965
Rate of Growth (percent) NPRE
15.79
24.01
(-) 0.79
15.56
6.17
Plan Revenue Expenditure (Rs. In crore)
1238
1652
1701
2079
2387
Rate of growth (per cent) PRE
41.16
33.44
2.97
22.22
14.81
NPRE/GSDP(per cent)
20.57
21.40
18.78
19.12
18.12
RE/TE2 (percent)
85.16
88.63
85.78
86.97
90.34

27. ANALYSIS OF EXPENDITURE S.O.E WISE EXPENDITURE AS PERCENTAGE TO TOTAL
(Rs. In Crore)
S.O.E WISE EXPENDITURE AS PERCENTAGE TO TOTAL
Sr. No
SOE-wise detail
Actuals
%age to Total
Budget Estimates
Budget Estimates 1
SALARIES
29.28
32.38
29.23 2
WAGES
198.31
0.92
154.55
0.65
152.80
0.54 3
GRANT IN AID(salary)
558.46
2.60
509.93
2.16
874.31
3.09 4
GRANT IN AID(Non Salary)
448.30
2.09
455.20
1.93
5.20 5
GRANT IN AID (Capital Assests)
431.13
2.01
379.71
1.61
530.30
1.87 6
PENSIONS
13.31
14.81
14.26 7
INTEREST
11.57
11.65
10.41 8
MAINTENANCE
7.01
7.79
6.49

28. EXPENDITURE ANALYSIS…..Continued9
MAJOR WORKS
7.18
6.76
9.19 10
INVESTMENTS
267.68
1.25
326.82
1.38
311.04
1.10 11
LOANS
10.42
7.95
6.71 12
SUBSIDY
467.15
2.18
792.49
3.36
939.3
3.31
ESTABLISHMENT RELATED
335.40
1.56
312.81
1.32
339.25
1.20
a) Travel Expenses
42.16
0.20
36.50
0.15
40.08
0.14
b) Office Expenses
111.59
0.54
124.59
0.53
128.12
0.45
c) Motor Vehicles
46.87
0.22
28.29
0.12
0.13
d) M.R
117.79
0.55
109.71
0.46
115.22
0.41
e) Liveries
2.12
0.01
2.13
6.22
0.02
f) Rent Rates & Taxes
11.13
0.05
10.26
0.04
11.73
g) Transfer Expenses
-0.26
0.00
1.33
OTHERS
8.60
6.25
7.41
TOTAL
100.00

29. RECENT TRENDS IN PUBLIC FINANCES
Plan Assistance stopped due to Planning Commission abolition.
CSS transfers to be reduced.
14th Finance Commission transfers to the tune of Rs. 72,000 crore (Rs. 28,000 crore of Central Taxes and Rs. 40,625 in RDG.)
32% to 42% increase in State Share has been a negative Sum game for Special Category States.
Special Category Status under question.
Fiscal Space under Stress.
Tax/Non Tax revenue to GSDP continue to be very low.

30. DEVELOPMENT STORY OF THE STATE AND FUTURE CHALLENGES
Economy is more diversified now
Public Infrastructure has developed substantially.
Maintenance of Public Assets an important challenge.
Govt. Sector employment is squeezed.
Unemployment/Skilling a challenge.
Quality of education needs focus.
Focus on Power Sector, Agriculture diversification and Tourism to increase growth.
To increase Tax to GSDP ratio to strengthen revenue base.

31. Thank You