Advertisement
When should a housing society in Mumbai start considering re...
From GST on JDAs to SEBI’s REIT reclassification and the S...
Stay ahead in the world of real estate with our daily podcas...
Stay ahead in the world of real estate with our daily podcas...
Himachal Pradesh is facing financial pressure as its borrowing has reached record levels, with INR 41,173 crore raised in FY 2025-26 while INR 32,004 crore was repaid. The state's total debt is steadily increasing and is expected to cross INR 1.12 lakh crore in FY 2026-27. A shrinking tax base, rising interest payments, and the discontinuation of Revenue Deficit Grants are adding to the strain. With nearly 80 percent of the budget tied up in committed expenses, limited funds remain for development and capital projects.
Himachal Pradesh is dealing with a tight financial situation, as reflected in its latest revised budget estimates. The state government raised loans worth INR 41,173 crore in the financial year 2025-26, marking its highest borrowing so far. At the same time, it repaid loans amounting to INR 32,004 crore, indicating a significant debt cycle. Advertisement
For the upcoming financial year 2026-27, the budget has made a provision to raise additional loans of INR 11,965 crore. This comes at a time when the state is already facing pressure due to rising debt levels, increasing interest payments, and the discontinuation of Revenue Deficit Grants, which earlier supported its finances.
As per the Budget in Brief, the total loan liability of the state reached INR 1,03,994 crore in 2025-26 and is expected to increase further to INR 1,12,319 crore in 2026-27. This reflects a consistent rise over the past few years. The total debt stood at INR 76,681 crore in 2022-23, increased to INR 85,295 crore in 2023-24, and further rose to INR 93,625 crore in 2024-25.
Interest payments have also shown a steady increase. The state paid INR 6,260.93 crore as interest in 2024-25, which rose to INR 6,693 crore in 2025-26. It is estimated to reach INR 7,271 crore in 2026-27. Future projections under the Fiscal Responsibility and Budget Management framework suggest that interest payments could go up to INR 8,115 crore in 2027-28 and INR 8,865 crore in 2028-29.
At the same time, subsidies are expected to reduce significantly. They are projected to decline from INR 3,205 crore in 2025-26 to INR 858.98 crore in 2026-27, with a gradual increase to INR 910.52 crore in 2027-28 and INR 965.15 crore in 2028-29.
One of the key concerns highlighted in the budget is the high level of committed expenditure. Around 80 percent of the state's budget is being spent on salaries, pensions, debt repayment, and interest payments. This leaves only about 20 percent available for capital expenditure and development activities, limiting the state's ability to invest in infrastructure and growth.
Source PTI
FAQ
Q1: What is the current debt situation of Himachal Pradesh?
Himachal Pradesh's debt has been rising steadily, with total loan liability reaching around INR 1,03,994 crore in 2025-26. It is projected to increase further to about INR 1,12,319 crore in 2026-27, indicating growing financial pressure on the state.
Q2: How much has the state borrowed and repaid recently?
In FY 2025-26, the state raised loans worth INR 41,173 crore, which is its highest borrowing so far. During the same period, it repaid around INR 32,004 crore, showing a continuous cycle of borrowing and repayment.
Q3: Why is the state's debt increasing?
The rise in debt is due to multiple factors such as a shrinking tax base, increasing interest payments, and the discontinuation of Revenue Deficit Grants. These factors have reduced financial support while increasing expenditure obligations.
Q4: How are interest payments impacting the state's finances?
Interest payments have been steadily increasing, from around INR 6,260 crore in 2024-25 to an estimated INR 7,271 crore in 2026-27. This growing burden is putting additional strain on the state's finances.
Q5: What is the plan for borrowing in 2026-27?
The state government has planned to raise additional loans of about INR 11,965 crore in 2026-27. This is aimed at managing ongoing financial requirements despite rising debt levels.
Q6: How much of the budget is spent on committed expenses?
Nearly 80% of the state's budget is spent on committed expenses such as salaries, pensions, debt repayment, and interest payments. This leaves limited funds for development and capital expenditure.
Q7: What is the impact on development spending?
With only around 20% of the budget available for capital and development projects, the state's ability to invest in infrastructure and growth is constrained, which could affect long-term economic expansion.
5th Jun, 2025
25th May, 2023
11th May, 2023
27th Apr, 2023
Advertisement
Facebook
Whatsapp
