SHIMLA, June 1— The cash-strapped Himachal Pradesh government will raise ₹800 crore by selling government securities to fund development works, according to a notification issued by the state finance department and published in the official gazette on Friday.
The Reserve Bank of India (RBI) will conduct the auction in Mumbai on June 3, with the payment to be made by successful bidders on June 4, an official said.
The borrowed amount will be credited to the state government’s account on June 3 and repaid over a period of 20 years, with the final repayment due by June 4, 2045. Interest on the loan will be paid biannually in June and December.
The Himachal government, led by Chief Minister Sukhvinder Singh Sukhu, is already grappling with a debt burden of ₹1.03 lakh crore. The Congress government has repeatedly blamed the previous BJP regime for what it terms as “financial mismanagement” that pushed the state into a debt trap.
Finance department sources revealed that after disbursing ₹30,000 crore annually on salaries, pensions and dearness allowance (DA), the state treasury is left with limited funds — making further borrowing necessary.
Pending liabilities include 13% DA installments and arrears from revised pay scales, adding further strain on the state’s finances.
According to the finance department, the fresh loan will be utilised exclusively for developmental works across the state. However, past borrowings show a different trend. During the budget session in March, CM Sukhu disclosed that out of the ₹29,046 crore borrowed over the last two years, only ₹8,693 crore could be spent on development, while ₹12,266 crore went towards interest payments and ₹8,087 crore on debt repayment.
Pension Policy Impact
The government has also cited a ₹3,000 crore loss due to reduction in Revenue Deficit Grant (RDG) and borrowing limits, worsened by the restoration of the old pension scheme, which led to a further ₹1,700 crore cut in permissible borrowing.
Officials say the ₹800 crore raised through this auction is aimed at bridging gaps in infrastructure and development projects currently stalled due to fund constraints.
