Himachal Economy Running On Debt, Total Exceeds Rs 1 Lakh Cr: CAG Report
Sukhu government took loans from the market 13 times in 12 months, besides long-term loans with higher interest rates on 10 separate occasions.
Published : March 31, 2026 at 1:46 PM IST
Shimla: The Comptroller and Auditor General (CAG), in its latest financial report on Himachal Pradesh, which was tabled in the state Assembly on Monday by Chief Minister Sukhvinder Singh Sukhu, has revealed that the state's debt burden has crossed the Rs 1 lakh crore mark. As a result, the state's economy is currently running on the support of borrowed funds.
Consider the following: The state government was compelled to borrow from the market 13 times in the last 12 months. The amounts involved in these 13 loans were: Rs 1,000 crore, Rs 700 crore, Rs 500 crore, Rs 700 crore, Rs 500 crore, Rs 500 crore, Rs 700 crore, Rs 600 crore, Rs 500 crore, Rs 500 crore, Rs 500 crore, Rs 322 crore, and Rs 337 crore, for a total sum that exceeds Rs 7,300 crore.
In the report — specifically within the notes appended to the 'Statement of Borrowings and Other Liabilities' — the CAG also noted that loans were also procured through other channels. These included long-term loans, which typically carry higher interest rates, secured on 10 separate occasions.
Overall, the report throws light on the alarming pace at which the state government is accumulating debt by securing open-market loans at interest rates ranging from 7.08-7.47 per cent. In contrast, the interest rates for the long-term loans ranged between 8.08-9.63 per cent.
The specific amounts borrowed in these long-term loans were: Rs 550 crore, Rs 200 crore, Rs 200 crore, Rs 150 crore, Rs 400 crore, Rs 200 crore, Rs 100 crore, Rs 300 crore, and Rs 95 crore.
Himachal's fiscal health is deteriorating continuously. When CM Sukhu presented a substantial supplementary budget, it was revealed that the state treasury had gone into overdraft. Consequently, an advance was secured from the RBI under the "Ways and Means Advances" (WMA) — short-term credit to bridge cash flow mismatches. Underscoring the grave economic situation is the total WMA of Rs 11,267 crore that the state government has availed so far.
The state's total debt figure has now reached Rs 1,03,331 crore. As of April 1, 2024, the state's debt burden stood at Rs 92,365 crore. Over the course of the year, the government raised loans exceeding Rs 26,622 crore, raising the total debt liability during the 2024-25 fiscal by around Rs 11,000 crore. During the same period, it also repaid debts totaling over Rs 18,000 crore.
