Shimla: Himachal Pradesh is increasingly relying on fresh borrowings to repay existing loans, the Comptroller and Auditor General (CAG) has flagged, raising serious concerns over the state’s financial stability. The warning comes as the state’s total debt burden has crossed the ₹1 lakh crore mark.
Chief Minister Sukhvinder Singh Sukhu tabled the CAG report for the financial year 2024–25 in the Legislative Assembly on Monday during the budget session. The report highlights a growing cycle of debt, where loans are being taken not for development but to service earlier liabilities.
According to the findings, the government availed loans 13 times during the 12-month period, while repayments were made on eight occasions, reflecting continuous dependence on borrowings. Public debt alone has risen to ₹75,554 crore, up from ₹70,369 crore in the previous year.
During the financial year, the state raised loans worth ₹26,622 crore and repaid ₹18,168 crore, leading to a net increase in the debt burden. The report clearly indicates that borrowing has become a primary tool for managing expenditure.
The fiscal situation has also shown signs of stress. The fiscal deficit stood at ₹12,611 crore, while the revenue deficit reached ₹6,804 crore, suggesting that the government’s income is insufficient to meet even its day-to-day expenses.
Liabilities under the Public Account—covering small savings, provident funds, and deposits—have also increased to ₹28,851 crore from ₹26,148 crore in the previous year, further adding to the overall financial pressure.
The report underscores the state’s heavy dependence on the Centre for funds. Himachal received ₹10,681 crore as its share of central taxes and ₹13,721 crore in grants during the year, forming a significant portion of its revenue.
Apart from the debt concerns, the CAG report has also pointed out serious irregularities in the management of disaster relief funds during the previous BJP government’s tenure. In 2019–20, the Centre withheld ₹61.07 crore out of ₹258.30 crore allocated under the State Disaster Response Fund (SDRF), citing misappropriation.
Additionally, ₹254.73 crore sanctioned under the National Disaster Response Fund (NDRF) between 2020 and 2022 was not released due to unutilised balances and accounting discrepancies. These issues resulted in delays of one to two years in carrying out relief operations.
The audit further revealed that ₹122.27 crore of disaster funds was kept in savings accounts instead of approved investment instruments, causing a loss of interest income. Moreover, ₹11.76 crore was spent on activities not permitted under the rules, with delays ranging from 11 to 33 months in relief-related works.
The CAG’s findings have once again brought Himachal Pradesh’s fragile financial condition into focus. With rising debt, increasing liabilities, and dependence on central assistance, the report raises critical questions about fiscal management and the sustainability of the state’s economic policies.
