Himachal exhausts Rs 6,200 cr loan limit, retd staff yet to get pension

The cash-strapped Himachal Government raised a loan of Rs 500 crore last week, exhausting its limit of Rs 6,200 crore loan for the current year.

Apart from exhausting the loan limit of Rs 6,200 crore for the current year (April 1 to December 31, 2024), the state government has also applied for a loan for the last quarter of the financial year 2024-25. In the financial year 2023-24, the loan raising limit for Himachal had been fixed at Rs 1,700 crore for the last quarter.

The state government could use this last instalment of Rs 500 crore loan for footing the pensions of the retired government employees. The over 2.25 lakh government employees have received their salaries but the retired employees are yet to receive their pension.

Faced with a grave financial crisis, Himachal requires Rs 2,000 crore per month to foot its committed expenditure on salary and pension.

With hardly any revenue-generating sectors, the state government is heavily dependent on the Centre for allocations under various heads. In fact, the state made national headlines two months ago when its employees and pensioners received delayed salaries and pensions. Chief Minister Sukhvinder Singh Sukhu claimed that this had been done merely to save the extra money that had to be paid on raising loans for giving salaries on the first of month.

On an average, Himachal has a loan limit of about Rs 8,000 crore in a financial year but the state is barely able to meet its committed liabilities with this amount. “Earlier, we could raise an additional loan of Rs 1,500 crore in lieu of the New Pension Scheme (NPS) contribution, which is now not possible after restoration of the old pension scheme,” an official said.

As part of the fulfilment of the 10 guarantees made by the ruling Congress in the run-up to the 2022 Vidhan Sabha poll, the state government restored the old pension scheme for over 1.35 lakh employees, putting an additional burden on the exchequer.

Road ahead may be tougher

• Himachal needs Rs 2,000 crore per month to foot expenditure on salary and pension
• State restored old pension scheme for 1.35 lakh employees, putting an additional burden on exchequer
• Next financial year 2025-26 can be tougher as the revenue deficit grant of Rs 6,258 crore, received from the Centre this year, will be reduced to almost half