Off-budget borrowing ‘death trap’ for Sikkim: BJP leader Thapa

Gangtok: During the financial business session of the Sikkim Legislative Assembly on Wednesday, Bharatiya Janata Party President and legislator Dilli Ram Thapa raised concerns about off-budget borrowing by the Sikkim government.

Thapa, during the discussion on the Fourth Supplementary Demands for Grants 2022-23, claimed that Sikkim is second only to Telangana in terms of such borrowing and referred to it as a “deathtrap”.

In his valedictory remarks at the Assembly, Thapa reiterated his concerns regarding the off-budget borrowing by the Sikkim government. Thapa pointed out that Sikkim has a revenue of around Rs 3000 crore, but the amount of the loan is about Rs 27,000 crore, which is beyond the net borrowing criteria.

He criticized the government for continuously borrowing instead of plugging the revenue leakage or increasing revenue. Thapa quoted Finance Minister Nirmala Sitharaman, who recently referred to off-budget borrowing as a “death trap,” and expressed his disagreement with the government’s decision to take such loans.

According to Thapa, these loans burden future generations as they will take another 25-30 years to repay.

Referring to the Comptroller and Auditor General report, Thapa said, “CAG report mentions non-disclosure and off-budget borrowing has a dual impact. It mentions how the borrowing is against 11th Finance Commission. Eight States have been declared to get off budget borrowing only after full disclosure and approval from the Indian government. It also includes Sikkim which is second among the highest loan taking States. Our loan borrowing has exceeded the net borrowing, it is more than the State revenue.”

The BJP President drew comparisons between the financial situation in Sikkim and Sri Lanka and Pakistan and expressed concerns about the officials in the state finance department who only know how to take out loans but not how to repay them.

He questioned whether the state has the potential to pay back the loans and emphasized that the state is currently running on austerity measures. He also stressed the importance of not considering heavy loans and off-budget loans, as they would require mortgaging the state’s properties and become a big threat to future generations. Thapa emphasized the need to focus on increasing revenue and plugging leakages, which would provide more revenue for the state.

He also expressed his willingness to submit reports on leakages and off-budget borrowing to central leaders.

Chief Minister and Finance Minister Prem Singh Golay countered the statements made by Thapa in the Assembly discussion, stating, “Since forming the government in 2019, we have reduced revenue spending and have not increased revenue through loans. The loans have been taken as per Central government norms, which are long-term loans extending almost 50 years with no interest fee. We assure that the Sikkimese economy will not be overburdened with these loans. With the passing of the Finance Bill 2023 on March 22, we are yet to utilize the allocation under the fourth Supplementary Demands for Grants before March 31, hence they are being passed.”

Thapa also raised concern on the recent Finance Bill in the Lok Sabha which has expanded two new clauses to the Income Tax Exemption in Sikkim, claiming the Bill was passed as per the Supreme Court’s judgement pertaining to the case filed by the Association of Old Settlers of Sikkim.

He further claimed that whatever was in the Supreme Court judgment had been incorporated into the Finance Bill without any changes. The judgment and the Finance Bill state that any individual who established that they were domiciled in Sikkim on or before 26 April 1975, but whose name does not appear in the register of the Sikkim Subject, shall be entitled to the benefit of the Income Tax exemption. Thapa said that he has no objection to the old settlers getting benefits but he wants to protect the old laws, 371F, and the Sikkimese people. He also claimed that there was no discussion in the Lok Sabha, and they have gone as per the judgment.

In criticizing Lok Sabha Member of Parliament Indra Hang Subba’s absence from the Finance Bill discussion in Parliament, Thapa stated, “If the Lok Sabha MP from Sikkim had been present at the Finance Bill session, he could have made submissions on Sikkim’s behalf. Unfortunately, he was not present and should have been to submit suggestions. The new Finance Bill, which was recently passed, includes two new clauses for an IT exemption to individuals domiciled in Sikkim on April 26, 1975, who will benefit from the exemption. The definition of ‘Sikkimese’ has also been expanded, diluting the SC judgement on 371F and old laws. The government needs to form a committee to fight against such injustices to the people, and the committee should include us (opposition legislators) as well.”

Thapa also raised concerns about why the CAG report and other related documents were presented to legislators only on the day of the Budget Assembly, which limited their ability to discuss the bills in detail. Sikkim Legislative Assembly Speaker Arun Kumar Upreti responded that this was the “norm of the Assembly and cannot be changed.” The Speaker added that finance bills are sensitive matters that cannot be disclosed prior to the Assembly session.

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