Govt raises Rs 322 crore loan as last instalment in this fiscal year
The Himachal Government has raised a loan of Rs 322 crore in the last quarter of financial year 2024-25. The Finance Department has issued a notification in this regard and the loan will be deposited in the state treasury on March 12. The loan will be for 10 years.
Himachal can raise about Rs 7,000 crore as loan every year as per the permissible limit allowed by the Central Government. The state government has been left with a loan limit of Rs 463 crore for the current financial year, ending on March 31. This was the last loan instalment that the government will avail of in the current financial year.
Chief Minister Sukhvinder Singh Sukhu, who also holds the Finance portfolio, will present the budget for the next financial year 2025-26 on March 17. Even as the financial health of the state remains grim, the coming year is expected to be even more difficult as the Revenue Deficit Grant (RDG) from the Central Government will reduce further.
Himachal had received Rs 8,058 crore as RDG for 2023-24 and during the current financial year, it reduced by Rs 1,800 crore to Rs 6,258 crore. In 2025-26, the RDG would reduce by another Rs 3,000 crore to a mere Rs 3,257 crore, which would make it even tougher for Himachal to meet its needs.
Sukhu has urged the Central Government to give relief in the cap imposed on loan raising and externally-funded projects so that there is more money available for development works. The income from the imposition of water cess is not on the expected lines as the power producers has challenged the government decision and the matter is pending in courts.
Himachal is facing an acute shortage of funds and its total debt has crossed Rs 1 lakh crore. With the RDG reducing and the Goods and Services Tax (GST) compensation ending, the state government is desperately looking to generate additional revenue from sectors like tourism, mining, power and the auction of liquor vends.
Meanwhile, the wait continues for Rs 9,200 crore Post Disaster Need Assessment (PDNA) relief from the Central Government for damages suffered due to devastation caused by unprecedented heavy rains in 2023. Despite repeated requests, the Central Government is yet to provide Himachal this amount.
The annual salary and pension bill of the cash-strapped government has mounted to Rs 26,722 crore, in addition to the salaries and pension of the employees of the boards and corporations.
Rs 7,000 crore annual limit allowed
- Himachal can raise about Rs 7,000 crore as loan every year as per the permissible limit allowed by the Centre
- The state government has been left with a loan limit of Rs 463 crore for the current financial year
