Shimla, Aug 31 (IANS): The debt burden of each of Himachal Pradesh's 6,856,509 people has now increased to a staggering Rs.3.70 crore over the past three and a half years.

Unable to meet its growing expenditure with tax and non-tax revenue generation, the state has increasingly fallen back on borrowings, and in the process the hill state's loan liabilities have risen by over Rs.5,400 crore in the past three-and-half years.

"On June 30, the loan liabilities had risen to Rs.27,603.66 crore, including outstanding guarantees of Rs.2858.38 crore in context of public sector undertakings," Pradeep Chauhan, adviser to economic and statistics department, told IANS.

"As of Dec 2007, these liabilities were Rs.22,189.91 crore," he said. "It means an increase by Rs.5413.75 crore." Undoubtedly, this has increased the state's financial woes.

Chief Minister Prem Kumar Dhumal had earlier informed the state assembly in a written reply that the central government had fixed a borrowing ceiling of Rs.1,647 crore for this fiscal.

"Efforts are being made by the state government to increase its own tax and non-tax revenue to remain within authorised ceiling," Dhumal said in reply to a question from Congress member G.S. Bali.

The state has its own sources of tax and non-tax revenue. Non-tax revenues are mainly the sale of electricity and royalties on forest produce and extraction of minerals, according to the chief minister.

The chief Minister blamed the central government for the state's poor financial position.

"The 13th Finance Commission has done injustice with the state," Dhumal told IANS. "The centre has been given a 125 percent raise over the 12th Finance Commission. We have merely got a 50 percent hike. Some states got more than 150 percent."

He said that the state would have to widen its tax revenues to generate income. "The interest liability is Rs.2,250 crore but the finance commission assessed it at Rs.1,600 crore," Dhumal said. "For five years, we have been told that our salary liability will increase by two percent only."

The state's annual salary liability is Rs.4,450 crore but the central government has assessed it at only Rs.3,600 crore. Similarly, the pension liability is Rs.1,850 crore but it was assessed at Rs.1,400 crore, according to Dhumal.

The total expenditure in the state's budget for 2011-12 has been pegged at Rs.16,708.47 crore with salaries accounting for Rs.5,881.66 crore, interest payments Rs.2,150.58 crore, loan repayments Rs.960.84 crore and pension Rs.2,210 crore.

During his budget speech, Dhumal said that out of the total budget, only 32.95 per cent would be utilised for development activities, the rest would go towards meeting the liabilities committed on account of salaries, pensions, interests and loans.

"For every Rs.100 spent, the state will have Rs.84.35 as total revenue receipts, including transfers from the centre. The gap of Rs.15.65 will have to be met through borrowings," he said.

"Out of every Rs.100 received, Rs.28.67 will accrue from our own tax revenues, Rs.14.15 from non-tax revenues, Rs.14.62 from share in central taxes, and Rs.42.56 from central grants," he said.

"Out of every Rs.100 spent, salaries will account for Rs.35.20, interest payments Rs.12.87, loan repayments Rs.5.75, and pensions Rs. 13.23. The remaining Rs.32.95 will be spent on development work and other activities," he said.

Excise and taxation department officials said the total tax collections, including VAT and excise duty, during the year amounted to Rs.3,045 crore, up from last year's Rs.2,274 crore.