Himachal’s Debt Spiral: CAG Warns of Mounting Financial Stress
Himachal Pradesh’s finances are under increasing strain, with the Comptroller and Auditor General (CAG) warning that the state is now borrowing fresh loans simply to repay old ones. The report, tabled by Chief Minister Sukhvinder Singh Sukhu in the Assembly, reveals that the state’s debt burden has crossed the ₹1 lakh crore mark — a troubling milestone for its economic stability.
The audit shows that in 2024–25, the government raised loans 13 times and repaid them on eight occasions, underscoring its dependence on borrowings. Public debt has climbed to ₹75,554 crore, up from ₹70,369 crore the previous year. Net borrowings added ₹8,454 crore to the overall debt load.
Fiscal indicators highlight the stress: the fiscal deficit stood at ₹12,611 crore, while the revenue deficit reached ₹6,804 crore — meaning the state’s income isn’t enough to cover even routine expenses. Liabilities under provident funds, savings, and deposits also rose to ₹28,851 crore.
The report points to Himachal’s heavy reliance on central support, with ₹10,681 crore received as its share of taxes and ₹13,721 crore in grants.
Beyond debt, the CAG flagged irregularities in disaster relief fund management during the previous BJP government. Funds were delayed or withheld due to misappropriation, unutilised balances, and accounting lapses, slowing relief operations by up to two years. In some cases, money was parked in savings accounts instead of approved instruments, causing loss of interest income.
Together, these findings paint a picture of fragile finances. With rising debt, mounting liabilities, and dependence on central aid, Himachal faces tough questions about fiscal management and the sustainability of its economic policies.
