Himachal Government set to raise Rs 800 cr loan for 'development'

Tribune News Service

Pratibha Chauhan

Shimla, June 4

The Congress is all set to raise a loan of Rs 800 crore for development works though the state is reeling under a huge debt burden of Rs 75,000 crore. The Central Government has imposed a limit of Rs 3,000 crore on external borrowings by Himachal. Besides, the Central Government has restricted the state’s borrowing capacity for ongoing projects to Rs 4,000 crore.

Cap on external borrowings

• The loan will be taken in two installments of Rs 500 crore and Rs 300 crore
• The loan of Rs 500 crore will be repaid in eight years and Rs 300 crore in six years
• The Central Government has imposed a limit of Rs 3,000 crore on external borrowings by Himachal

The loan will be taken in two installments of Rs 500 crore and Rs 300 crore and a notification has been issued in this regard. The reason cited for raising the loan is development works, but it is common knowledge that the government is finding it hard to foot the huge salary and pension bills of its employees and pensioners. The loan of Rs 500 crore will be repaid in eight years, while Rs 300 crore will be repaid in six years.

Himachal suffered a setback when the Central Government imposed a cap on loans that it can raise from external agencies such as the World Bank, Asian Development Bank (ADB), Japan International Cooperation Agency (JICA), KFW Development Bank and several other foreign agencies and banks. These agencies have funded several projects related to tourism, health, environment, forest and other sectors in Himachal.

The restrictions imposed by the Centre on fund raising from external agencies will add to the woes of the cash-strapped hill state.

The total debt burden on the state government has crossed Rs 75,000 crore, but it has no option but to raise loans to keep the wheels of development moving. Chief Minister Sukhvinder Singh Sukhu blames the previous BJP government for pushing Himachal on the verge of bankruptcy. He has constituted a Cabinet sub-committee headed by Deputy Chief Minister Mukesh Agnihotri to come out with a White paper on the financial position of Himachal.

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