Himachal Govt raises Rs 1,000-cr loan for development

Pratibha Chauhan

Tribune News Service

Shimla, January 22

The Himachal Government has raised a loan of Rs 1,000 crore in two equal installments for undertaking development works in the state. The Finance Department has decided to raise these loans with the last quarter of the financial year 2020-21 coming to an end on March 31.

The two installments of Rs 500 crore each are being taken for a period of 10 and 12 years from the open market. The Rs 1,000-crore loan will be received by January 27.

The mounting debt trap of over Rs 58,000 crore has been a cause of worry for the state government. With little avenues of resource generation, Himachal remains dependent on loans for undertaking development works. Most of the development works, be it in roads, health, education, housing and infrastructure are undertaken under various Centrally sponsored schemes.

With this loan of Rs 1,000 crore, the Himachal Government can now only raise a loan of Rs 1,500 crore only for the current financial year. The state government has so far raised Rs 5,000 crore during this financial year. It could raise additional loan as Centre has given the offer of taking two per cent extra loan, which will allow the BJP regime to raise Rs 1,000 crore extra, besides the remaining Rs 1,500 crore.

With all major sectors taking a severe hit due to Covid pandemic, it is being expected that the BJP regime will have to take the remaining limit of Rs 1,500 crore by March 31, 2021 when the financial year ends. The recommendations of the 15th Finance Commission will also come into effect after March 2021.

The Rs 450-crore special interest free 50-year-loan to Himachal Pradesh given by the Union Finance Ministry in October 2020 came as a breather for the sagging economy which is already under a huge debt trap with little revenue generating avenues. Himachal was amongst the top beneficiary states in the country in getting one of the highest allocations.

To get money by Jan 27, debt mounts

• The two installments of Rs500 crore each are being taken for a period of 10 and 12 years from the open market. The Rs1,000-crore loan will be received by January 27.
• The mounting debt trap of over Rs58,000 crore has been a cause of worry for the state government. With little avenues of resource generation, Himachal remains dependent on loans for undertaking development works.
• With major sectors taking a severe hit due to Covid pandemic, it is being expected that the BJP regime will have to take the remaining limit of Rs1,500 crore by March 31.

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