Shimla, March 24 Facing a severe financial crisis, the Himachal Pradesh government took out loans amounting to Rs 41,173 crore, which is its highest ever, and also repaid loans worth Rs 32,004 crore in the financial year 2025-26, according to the revised budget estimates.
A provision of Rs 11,965 has been made in the budget for the financial year 2026-27 for raising loans.
The rising debt and interest burden on the Himachal Pradesh government, along with the discontinuation of Revenue Deficit Grants (RDG), has become a major challenge for the economy, alongside a narrow tax base.
According to the figures in "Budget in Brief," the government's debt liability stood at Rs 1,03,994 crore in 2025-26, which is estimated to reach Rs 1,12,319 crore in 2026-27.
The total debt burden of the government was Rs 76,681 crore in 2022-23, Rs 85,295 crore in 2023-24, and Rs 93,625 crore in 2024-25, showing a rising trend. Interest payments were Rs 6,260.93 crore in 2024-25 and Rs 6,693 crore in 2025-26, and are estimated to be Rs 7,271 crore in 2026-27.
The Fiscal Responsibility and Budget Management (FRBM) Act has also reflected this increasing trend in interest payments, estimating it at Rs 8,115 crore in 2027-28 and Rs 8,865 crore in 2028-29, while reducing subsidies from Rs 3,205 crore in 2025-26 to Rs 858.98 crore in 2026-27, Rs 910.52 crore in 2027-28, and Rs 965.15 crore in 2028-29.
The situation is concerning because the government's committed expenditure on salaries, pensions, debt repayment, interest payments, and other areas accounts for about 80% of the budget, leaving only 20% for capital works and other activities.