Ganesh Rai slams State Budget as debt-driven, anti-employment

GANGTOK,: Citizen Action Party (CAP) Sikkim president Ganesh Kumar Rai on Friday criticised the ruling Sikkim Krantikari Morcha (SKM) government over its eighth State Budget, alleging that the budget is heavily dependent on borrowings (loans), fails to address unemployment and income generation, and places an unsustainable financial burden on the State.

Addressing a press conference at the CAP Sikkim headquarters in Ranipool, Rai said the budget was presented four months later than the scheduled time and alleged that the government was compelled to present a full budget only after sustained pressure from the opposition.

He said the budget should be assessed not only through the Chief Minister's speech but also through the Medium-Term Fiscal Plan presented in the Assembly.

According to Rai, the budget projects Sikkim's Gross State Domestic Product (GSDP) at Rs. 62,973 crore while the total budget outlay stands at Rs. 19,215.53 crore. The total expenditure for the financial year has been estimated at Rs. 18,452.53 crore, which he claimed amounts to nearly 30 percent of the State's projected economy.

Rai alleged that with this year's expenditure, the SKM government would have spent more than Rs. 1 lakh crore during its tenure since assuming office in 2019.

"If the government has spent more in eight years than what previous governments spent over 44 years, the people deserve to know how many jobs have been created, how many industries have been established and how much the income of ordinary citizens has increased," he said.

The CAP president also criticized what he described as major omissions in the Chief Minister's 65-page budget speech.

He claimed the speech made no mention of unemployment, job creation, income generation, poverty reduction, the middle class, drug abuse or the Pay Commission for government employees.

"If unemployment is not even acknowledged in the budget, unemployed youth cannot expect any relief. If income generation is absent, the people's earnings will not increase. There is nothing for the poor, the middle class or government employees awaiting salary revision," Rai said.

Referring to the Medium-Term Fiscal Plan, Rai claimed it contained serious concerns flagged by NITI Aayog regarding Sikkim's future.

He said the report highlighted the State's low fertility rate of 1.1, significantly below the replacement level of 2.1, and warned of the rising debt burden in relation to the GSDP.

According to Rai, the report calls for immediate policy intervention to address both demographic decline and increasing debt.

"The people should rely on official documents presented in the Assembly rather than political speeches. The government's own fiscal plan acknowledges these challenges," he said.

Rai further claimed that despite Sikkim recording one of the highest per capita incomes in the country, the economic gains have not improved living standards for ordinary citizens.

"The government itself has admitted that while the economy has grown, the income generated is flowing outside Sikkim and is not benefiting local people," he alleged.

Questioning the State's finances, Rai said the government earns only a small share of its revenue from its own sources.

He said that out of every Rs. 100 spent by the government, only Rs 13 comes from State tax revenue and Rs. 6 from non-tax revenue, while Rs 29 comes from the State's share of central taxes, Rs 22 from grants-in-aid and the remaining Rs 30 through borrowings.

He cited the government's own budget estimates, stating that State tax revenue has been projected at Rs. 2,275 crore, non-tax revenue at Rs. 1,124 crore, the share of central taxes at Rs. 5,153 crore and central grants at Rs. 3,867 crore.

He further said the government plans gross borrowings of Rs. 2,765 crore and another Rs. 3,312 crore under the Government of India's 50-Year Interest-Free Loan Scheme for capital investment, taking the total borrowings to Rs. 6,077 crore this year.

Rai alleged this represented the highest borrowing in the State's history.

He further claimed that while the Fiscal Responsibility and Budget Management (FRBM) Act permits borrowing up to 3 percent of GSDP, Sikkim's fiscal deficit has reached 8.34 percent.

"When the SKM government came to power in 2019, it criticized previous governments for leaving behind a debt of around Rs. 6,000 crore accumulated over 44 years. Today, the government itself is taking loans worth Rs. 6,077 crore in a single year," he alleged.

Rai also questioned the government's claim of maintaining a revenue surplus of 1.03 percent.

He alleged that the State was actually facing a revenue deficit and was relying on borrowings to sustain routine expenditure.

As an example, he claimed the government had expected Rs. 3,628 crore in central grants during the previous financial year but eventually received only Rs. 1,843 crore, which he said amounted to nearly a 50 percent reduction.

He further alleged that the government had increasingly relied on market borrowings through RBI bonds. He claimed the growing debt burden would ultimately fall on future generations.

Rai also alleged that recommendations of the 16th Finance Commission would reduce Sikkim's financial allocation by about Rs. 5,200 crore over the next five years, including an estimated reduction of Rs 800 crore in the first year.

He claimed the budget failed to create employment opportunities, strengthen businesses or improve household incomes.

Instead, he alleged the budget prioritised expenditure on the Chief Minister's travel, official residences, advisers, OSDs and other administrative expenses.

"The budget does not benefit unemployed youth, traders or ordinary citizens. It only increases Sikkim's debt burden by another Rs. 6,000 crore," Rai alleged.

He also questioned the government's projected GSDP growth rate of 10.5 percent, describing it as "jobless growth" that benefits only a select few rather than the wider population.

Apart from financial issues, Rai strongly criticised the passage of the Private State Board of Open Schooling and Vocational Education Bill during the Assembly session.

He alleged that the legislation would allow to establish a private open schooling board in Sikkim despite the State already having a Board of Open and Skill Education established under a 2020 Act.

Rai further alleged that the same foundation had earlier been granted permission to establish a university in Kitam and questioned the need to entrust another educational institution to the organisation.

He said local educationists should have been given the opportunity instead of an outside foundation.

Expressing strong opposition to both the budget and the education legislation, Rai urged the people of Sikkim to remain vigilant and scrutinise official government documents rather than relying solely on political speeches.

He stated that CAP would continue opposing what it described as policies that increase debt and fail to generate employment or improve the lives of ordinary citizens.