Sunil Chadha
SHIMLA: As the Himachal Pradesh Vidhan Sabha currently holds its fourth-longest monsoon session, the spotlight is once again on the state’s worsening financial crisis. But notably, no debate has been planned in the Assembly on sustainable revenue generation even as the state’s debt has crossed the Rs 1 lakh crore mark.
Despite Assembly Speaker Kuldeep Singh Pathania’s appeal for meaningful discussions on public welfare and fiscal matters, opposition leaders and analysts say the government is failing to address the core issue — how to revive the state’s depleted finances.
Mounting debt, no da for employees
The financial stress is evident as employees are still awaiting their pending dearness allowance (DA) and the government continues to depend heavily on borrowing. Most recently, the state has moved to raise an additional Rs 1,500 crore through two new loans.
The Finance Department has issued official notifications — one for Rs 1,000 crore with a repayment period of 15 years and another for Rs 500 crore, to be repaid in 10 years. Both loans will accrue interest bi-annually and will be auctioned through the Reserve Bank of India on August 26.
Government officials say these borrowings are necessary to meet development commitments, but critics argue they only postpone the crisis while deepening the debt trap.
Revenue moves stir controversy
In a bid to boost income, the government recently approved the reintroduction of state-run lotteries, nearly 25 years after they were banned in 2000. The move could generate from Rs 50 to Rs 100 crore in revenue. The system will be reintroduced through a tender process, modelled on successful frameworks in neighbouring states like Punjab.
However, the decision has triggered backlash. The opposition warns of the social risks, saying lotteries can lead to addiction and financial ruin for low-income citizens. Critics also question whether such measures reflect a desperate short-term fix rather than a serious revenue policy.
Meanwhile, there are murmurs within industrial circles about a potential increase in cess and power tariffs, which could place additional strain on businesses already grappling with inflation and poor infrastructure. Economists warn that aggressive taxation without reform could drive investment out of the state, worsening the job crisis.
“The government seems to be focusing on borrowings and risky revenue sources like lotteries, instead of pushing structural reforms or attracting long-term investment,” said a senior economic analyst based in Shimla.
