Himachal’s Mounting Debt: CM Sukhu Calls for Patience Amid Financial Strain
In a sobering update to the Himachal Pradesh Legislative Assembly, Chief Minister Sukhvinder Singh Sukhu revealed that the state’s debt has surged to ₹98,182 crore as of July 31, 2025 — and is expected to cross ₹1 lakh crore soon. Responding to a query from Bharmour BJP MLA Dr. Janak Raj, Sukhu emphasized that the loans are being used for long-term development and have been structured over 22 years to ease immediate repayment pressure.
For the current financial year (2025–26), the government has earmarked ₹4,243.57 crore for repaying the principal and ₹6,738.85 crore for interest payments. Sukhu acknowledged the state’s limited financial resources and its growing dependence on central assistance, especially after the implementation of GST in 2017, which merged several state taxes into a single national framework. While the Centre provided compensation for five years, that support ended in mid-2022, leaving Himachal to navigate a tougher fiscal landscape.
The CM also highlighted a sharp drop in the revenue deficit grant — from ₹11,431 crore in 2020–21 to just ₹3,257 crore in 2025–26 — further tightening the state’s budget. With nearly 67% of the ₹58,514 crore budget going toward salaries, pensions, interest, and debt servicing, little is left for new development initiatives.
Independent analyses and CAG data paint a grim picture: the debt-to-GSDP ratio has climbed to 42.5%, and per capita debt now stands at ₹1.17 lakh. Experts warn that unless the state significantly boosts its own revenue and reins in committed expenditures, the fiscal deficit could breach safe limits, threatening long-term financial stability.
Despite the challenges, CM Sukhu assured the Assembly that the government is actively working on measures to strengthen internal revenue sources and reduce reliance on borrowing. The road ahead may be steep, but the administration remains committed to steering Himachal toward a more sustainable financial future.
