Himachal Pradesh finds itself in a deep financial crisis, with both the previous BJP government under Jai Ram Thakur and the current Congress regime led by Chief Minister Sukhvinder Singh Sukhu facing accusations of mismanaging the state’s economy.
Rose by nearly Rs 30,000 crore under BJP rule
When Jai Ram Thakur took over as the Chief Minister in 2018, his government inherited a debt of Rs 48,000 crore from his predecessor Virbhadra Singh. However, during Thakur’s five-year tenure, the state’s debt skyrocketed by Rs 30,000 crore, reaching approximately Rs 70,000 crore by 2022. Despite the BJP’s claims of sound fiscal policies, this surge in debt added significantly to the state’s financial burden.
The situation further deteriorated when the Congress returned to power in December 2022.
State’s debt nears Rs 1 lakh crore
In just 10 months, the Sukhu government borrowed nearly Rs 10,000 crore, pushing Himachal Pradesh’s total debt to a staggering Rs 90,000 crore. The opposition BJP has accused the current government of aggravating the financial crisis, warning that if borrowing continues at this pace, the state could reach Rs 1 lakh crore in debt by the end of the fiscal year.
In response to the financial strain, Chief Minister Sukhu announced new measures on September 4 to improve cash flow management. From now on, salaries for government employees will be paid on the 5th of every month, while pensions for retirees will be disbursed on the 10th.
This decision aligns payments with the state’s revenue inflows, including the Rs 520 crore revenue deficit grant received from the central government on the 6th and Rs 740 crore from central taxes on the 10th.
Sukhu blames BJP for financial mismanagement
Sukhu has consistently blamed the previous BJP government for leaving the state in poor financial health. He claimed that due to the BJP’s failure to effectively represent Himachal’s case before the 15th Finance Commission, the state’s revenue deficit grant was cut from Rs 8,058 crore in 2023-24 to Rs 6,258 crore this year, with a further reduction to Rs 3,257 crore expected next year.
Additionally, Sukhu pointed out that the BJP-led central government imposed restrictions on Himachal after it decided to implement the Old Pension Scheme, further tightening the state’s borrowing capacity.
Sukhu accelerated borrowing, claims Jai Ram
On the other hand, Thakur defended his government, claiming that while the BJP accumulated Rs 19,600 crore in debt over five years, the Congress-led administration has raised Rs 24,000 crore in just 20 months. He argued that the Congress government has accelerated borrowing at an unsustainable rate, which will worsen the financial situation.
Despite the back-and-forth between the two parties, the reality remains that Himachal Pradesh’s debt has ballooned from Rs 47,906 crore in 2018 to Rs 76,651 crore in 2023, leaving the state grappling with a massive fiscal challenge. Both the BJP and Congress now face mounting pressure to find a solution to stabilise the state’s finances while ensuring the timely payment of salaries, pensions and funding for development projects.
