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Government to Raise ₹1,500 Crore Loan for Development
The Himachal Pradesh government is set to raise ₹1,500 crore in loans to meet its development needs, leaving only ₹300 crore available within its borrowing limit for the remaining four months of the year.
Shimla, Updated At : 09:04 AM Aug 24, 2025 IST
The Finance Department has issued two notifications for raising funds—₹1,000 crore through a 15-year loan, repayable by August 28, 2040, and ₹500 crore through a 10-year loan. Approval for the borrowing has been secured from the Central government under Article 293(3) of the Constitution.
Once the ₹1,500 crore is raised, the government will have exhausted most of its borrowing capacity, with only ₹300 crore left until December. Meanwhile, employees are still awaiting payment of the pending 3% Dearness Allowance (DA).
Chief Minister Sukhvinder Singh Sukhu has acknowledged that, with the Centre capping the state’s annual borrowing limit at ₹6,200 crore, the coming months will be financially challenging for Himachal Pradesh. However, he assured that the government will prioritize its core liabilities such as salaries and pensions, ensuring timely payments. The situation is expected to ease next year when grants recommended under the 15th Finance Commission for 2026–31 are released.
The state’s overall debt burden has already crossed ₹1 lakh crore, making the disbursement of salaries and pensions a major challenge. The financial load has further increased after the restoration of the Old Pension Scheme (OPS). So far, 1.17 lakh employees have opted for OPS, while only 1,365 have chosen to remain with the New Pension Scheme (NPS).
The state has repeatedly urged the Centre to refund around ₹9,000 crore of NPS contributions following the switch to OPS. Himachal requires nearly ₹30,000 crore annually to cover salaries and pensions for its employees and retirees.
With limited avenues for revenue—primarily taxes, mining, and excise duties—the state is facing a severe financial crunch. This year, the revenue deficit grant has fallen to just ₹3,200 crore, while the Centre has also tightened borrowing limits in the wake of OPS restoration.
