Govt to raise Rs 1,300-cr loan for development, clearing liabilities

The Himachal Government has decided to raise a loan of Rs 1,300 crore to meet its development needs and clear the pending liabilities, taking the total loan amount raised in the 2025-26 financial year to Rs 2,200 crore.

The Finance Department today issued a notification regarding the Rs 1,300 crore loan, which will be raised in two installments of Rs 800 crore for nine years and Rs 500 crore for seven years and will be returned by April 30, 2034.

The consent of the Central Government has been obtained for raising the loan, as required by Article 293(3) of the Constitution. The state government had raised a loan of Rs 900 crore on April 2, just after the commencement of the financial year 2025-26.

The loan amount will be utilised for development works and for making pending payments to the contractors of the Public Works Department and the Jal Shakti Department. Chief Minister Sukhvinder Singh Sukhu has already directed officials concerned to clear the pending payments of the contractors at the earliest. Bills under the Himcare scheme are also pending.

Himachal can raise only up to Rs 7,000 crore as loan in 2025-26. As such, raising Rs 2,200 crore in the first month of the financial year can make the going tough for the government through the year till March 31, 2026. The total loan liability of the state government has already crossed Rs 1 lakh crore.

The current fiscal year is likely to be financially tough for the state government as the Revenue Deficit Grant (RDG) has reduced to Rs 3,257 crore from Rs 6,258 crore in 2024-25. The Goods and Services Tax (GST) compensation had already ended in June 2022, so there was no hope of additional revenue.

Himachal Tribune