Cash-strapped Himachal government raises loan of Rs 800 crore

Cash-strapped Himachal government has again raised a loan of Rs 800 crore to be able to meet its development needs even as the total debt burden on the state has crossed Rs 80,000 crore.

Himachal, which has suffered more than Rs 12,000 crore loss due to colossal damage caused to its infrastructure like roads, bridges, power and electricity supply during monsoon rains, is facing cash crunch to meet its development needs. The raising of the Rs 800-crore loan comes close on the heels of the government raising Rs 1,000 crore loan in October.

With the latest loan of Rs 800 crore, the total loan raised by the state government has gone close to Rs 11,000 crore. Even as the state government has raised a Rs 800 loan, the over 2.50 lakh government employees and the pensioners are awaiting grant of Dearness Allowance (DA), which is a huge pending liability. It was being expected that the Congress government would grant DA to the employees and pensioners on Diwali but with Chief Minister Sukhvinder Singh Sukhu being unwell and admitted to AIIMS, Delhi, the grant to DA has been delayed.

With the Centre putting a cap on loan raising limit of Himachal at Rs 3,000 crore, the state government is finding it extremely difficult to meet its development needs. The fact that revenue from excise and the GST has also not witnessed a hike, is causing immense worry to the Sukhu regime.

Even as the total debt burden of the state government has crossed Rs 80,000 crore, there is no option but to resort to raising loans to keep the wheels of development moving. Blaming the previous BJP regime of pushing Himachal on the verge of bankruptcy, a White Paper, detailing the financial health of the state, was placed in the Assembly during the monsoon session. Chief Minister Sukhvinder Singh Sukhu had constituted a Cabinet sub-committee headed by Deputy CM Mukesh Agnihotri to come out with a White Paper on the financial position of the government.

The two main political players, the Congress and the BJP have been trading charges for putting the state under huge debt even though the fact remains that both have had to raise loans to meet the state's development needs.

Centre's cap of Rs 4,000 crore

Himachal has suffered a major setback as the Centre had imposed a cap of Rs 4,000 crore on funds that can be raised as loans from external agencies like the World Bank, the Asian Development Bank, Japan International Cooperation Agency, the KFW Development Bank and several other foreign agencies.
The World Bank, the ADB and JICA, besides other external agencies, are funding several projects in areas like tourism, health, environment, forest and other sectors.

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