Himachal Government to raise Rs 1,100 cr loan to meet liabilities

Tribune News Service

Pratibha Chauhan

Shimla, March 7

The state government has decided to raise Rs 1,100 crore as loan to meet its liabilities. It is facing a big challenge of paying arrears to its employees and pensioners.

In view of its grim financial health, the state government has written to the Central Government to raise the limit for loans for the financial year 2023-24. If the Central Government approves its request, the state government can raise another loan of Rs 1,000 crore again this month.

The government has announced four per cent dearness allowance (DA) to its employees, taking the total DA to 38 per cent. But for the payment of enhanced DA, it needs money. Besides, Chief Minister Sukhvinder Singh Sukhu had recently announced that the fifth election guarantee of the payment of Rs 1,500 monthly financial assistance to women aged 18 to 60 years would be fulfilled. This would put additional financial burden of Rs 800 crore on the state exchequer every year.

The Congress government has so far raised Rs 7,400 crore as loans in this financial year. The BJP accuses the state government of creating a record by raising Rs 14,000 crore as loans during its 14-month rule. The state government has been trying to tap areas like mining, solar and hydropower generation and tourism to generate much-needed resources.

The total debt liability of the state has risen to almost Rs 87,788 crore, as mentioned in the Budget proposals for 2024-25 presented by the Chief Minister in the Vidhan Sabha. Himachal has again urged the Central Government to enhance its loan limit in view of the revenue deficit so that development works are not affected.

The Congress and the BJP have been trading charges over the fiscal health of the state. Both blame each other for pushing the state on the brink of financial bankruptcy. The state government had even prepared a White Paper on the state’s finances and tabled it in the Vidhan Sabha. A Cabinet sub-committee, headed by Deputy Chief Minister Mukesh Agnihotri, had prepared the document.

However, the recent Himachal High Court decision terming water cess on hydroelectric power generation as illegal was a setback to the state government. Himachal had hoped to generate Rs 2,000 crore annually through water cess on 175 hydroelectric projects, some of whom had moved court against the decision.

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