Himachal’s long-standing reliance on central financial assistance for budgetary support, compounded by the failure of successive Congress and BJP governments to identify sustainable revenue streams, has led to a deepening fiscal crisis. The unchecked accumulation of debt—Rs 13,442.56 crore under the BJP in 2013-14, Rs 47,906.21 crore during the Congress tenure in 2018-19, and a staggering Rs 63,735.61 crore legacy left by the Jai Ram regime in 2021-22—has placed the Sukhu government in a precarious financial bind.

The Centre’s vindictive stance towards the Sukhu government largely stems from its decision to restore the Old Pension Scheme (OPS)—a key electoral promise that played a decisive role in the BJP’s defeat in Himachal. Adding to the friction, the BJP’s failed ‘Operation Lotus’ attempt to topple the Congress government deepened political hostilities, resulting in punitive fiscal measures. The Centre has systematically curtailed Himachal’s financial lifelines by reducing the overdraft limit, stalling the release of funds for central projects and schemes under various pretexts, delaying the Revenue Deficit Grant, and withdrawing GST compensation. Further compounding the crisis, restrictions on borrowing, prolonged delays in disaster relief funds, and inadequate financial support for infrastructure projects have severely strained the state’s economy.

Shrinking Capital Expenditure Sparks Concern

Himachal Pradesh’s capital expenditure has nosedived by forty-six point........

© Free Press Journal