Image Credits : Business Today
Himachal Pradesh is currently facing a financial crisis, with the state’s debt reaching an alarming ₹86,589 crore. Recent political debates have pointed fingers at the Congress government, accusing it of accumulating this entire debt over the past two years. However, a closer examination of the state’s finances paints a more complex picture.
According to data from the Comptroller and Auditor General (CAG), Himachal Pradesh’s debt did rise sharply under the current Congress administration, but the full burden cannot be attributed to them alone. The debt increased from ₹73,534 crore in the 2021-22 fiscal year to ₹86,589 crore by the end of 2022-23. This means that the state’s debt grew by ₹13,055 crore during the last fiscal year. However, this spike in debt is partly due to long-standing financial commitments, such as salary payments and pension obligations, which have been difficult to manage.
The implementation of the Sixth Pay Commission has significantly impacted the state’s finances, with salary expenditures rising from ₹11,641 crore in 2021-22 to ₹15,669 crore in 2022-23. Pension costs have also seen a similar upward trend, adding to the financial strain. These increases, while necessary, have further deepened the state’s fiscal challenges.
Moreover, a white paper issued by the government earlier this year highlights that Himachal Pradesh’s per capita debt has now surpassed ₹1 lakh. While the revenue deficit has seen a marginal reduction—from ₹7,962 crore in 2021-22 to ₹6,335 crore in 2022-23—the overall financial outlook remains troubling.
The state has been grappling with structural fiscal issues for years, characterized by high spending and limited revenue generation. Addressing this crisis will require a comprehensive approach, focusing on sustainable financial management and long-term reforms rather than quick fixes.