Himachal Pradesh News
Himachal Pradesh Raises Rs 700 Crore More Loan Amid Fiscal Pressure, Total Borrowings Reach Rs 2,800 Crore in FY27
Facing continued financial constraints, the Himachal Pradesh government has decided to raise an additional Rs 700 crore loan, pushing its total borrowings for the financial year 2026-27 to Rs 2,800 crore.
Facing continued financial constraints, the Himachal Pradesh government has decided to raise an additional Rs 700 crore loan, pushing its total borrowings for the financial year 2026-27 to Rs 2,800 crore.
The state’s Finance Department issued a notification on Friday approving the fresh borrowing after receiving the mandatory clearance from the Central Government under Article 293(3) of the Constitution. The latest loan will carry a tenure of 13 years and is scheduled to mature on July 8, 2039.
Borrowings Continue Amid Tight Fiscal Situation
The newly approved borrowing comes after a series of loans raised earlier this financial year. Himachal Pradesh had already borrowed Rs 900 crore in April, Rs 500 crore in May, followed by Rs 400 crore and Rs 300 crore in June.
Officials said the loan raised in May carried an interest rate of 7.81 percent and will be repaid in 2036.
With the latest infusion of funds, the hill state’s cumulative borrowing in FY 2026-27 has now reached Rs 2,800 crore.
Why Himachal Pradesh Is Borrowing More
The Congress-led government has been navigating a difficult fiscal landscape following the discontinuation of the Revenue Deficit Grant (RDG) from the Centre. The grant had previously contributed an estimated Rs 8,000 crore to Rs 10,000 crore annually to the state’s finances.
Apart from the reduction in central assistance, Himachal Pradesh has also faced restrictions on its borrowing limits and funding support under externally aided projects, adding to budgetary pressures.
Rising Debt Burden Raises Concerns
According to official estimates, Himachal Pradesh’s outstanding debt has crossed Rs 1.04 lakh crore, putting significant strain on the state’s finances.
A major share of government expenditure continues to be directed toward committed liabilities such as salaries, pensions, interest payments, debt servicing and grants to autonomous institutions.
Financial data suggests that nearly Rs 80 out of every Rs 100 spent by the government is allocated to fixed obligations, leaving only around Rs 20 available for development projects, infrastructure expansion and capital investment.
Economists believe the limited fiscal space could pose challenges for the state’s long-term development agenda unless additional revenue sources are identified or expenditure patterns are rationalised.
