Devastated by heavy rain, state to raise Rs 1,000 crore loan for development

The Himachal Government has decided to raise Rs 1,000 crore loan for development works at a time when heavy rain, cloudbursts and landslides have caused severe damage to infrastructure.

The Finance Department yesterday issued a notification for raising Rs 1,000 crore loan for 22 years, which will be repaid by July 30, 2047. The loan will be utilised for undertaking development works. The consent of the Central Government has been obtained to float the loan, as required under Article 293(3) of the Constitution of India.

The debt burden of the state government has already crossed Rs 1 lakh crore. The loan raising limit of the state for the current year has been fixed at Rs 7,000 crore and out of which, the Congress government has already raised Rs 5,200 crore. In 2024-25, the state government had raised Rs 29,046 crore loan.

The Cabinet Sub-committee on Resource Mobilisation has recommended to the state government to approach the Central Government for the waiver of Rs 1 lakh crore debt and a hike in the loan raising limit by another 2 per cent.

The current financial year is likely to be very tough for the state government, as the Revenue Deficit Grant (RDG) will come down to Rs 3,257 crore from Rs 6,258 crore in 2024-25. The Goods and Services Tax (GST) compensation had ended in June 2022, so there was no hope of additional revenue.

At present, the government is in a very difficult situation, as the state has suffered damage and losses to the tune of over Rs 1,400 crore in the first month of the ongoing monsoon season. Massive damage has been caused to public infrastructure like roads, bridges, water and electricity supply schemes, especially in Seraj, Nachan and Karsog areas of Mandi district. The Central Government has approved over Rs 2,000 crore against the demand of Rs 9,200 crore in view of losses suffered during the 2023 monsoon disaster.

Besides, private property has also suffered huge damage and more than 1,000 persons have been rendered homeless in Mandi district. As such, the state government is constrained to undertake large scale rescue and restoration work. A total of 153 persons have lost their lives, including those who died in accidents since June 20 when the monsoon season started, while 34 persons are still missing.

Himachal Tribune