Himachal Pradesh Planning To Roll Freebies Back Amid Financial Struggle

As Himachal Pradesh grapples with a financial crisis, Chief Minister Sukhvinder Singh Sukhu-led government is working on ways to limit the state’s spending. Earlier, the CM informed that he and his cabinet would not take salaries for two months as the mounting debts and ambitious promises have taken a toll on the state’s financial health.

Stating that the government will review the subsidies being given, the CM told multiple media outlets that they have already started the review of subsidies which were introduced by the previous Bhartiya Janata Party (BJP) government and are reversing some after the assessment of their financial impact.

As per the media reports, the state’s debt had gone up to Rs 76,651 crore in 2023 from Rs 47,906 crore in 2018. BJP has accused the current state government of financial mismanagement. The revenue deficit grant has been reduced by Rs 1,800 crore for the current financial year. The central government has brought the state’s borrowing limit down by Rs 5,500 crore. Now, the state can borrow upto 3.5 per cent of its gross domestic product (GDP), as compared to 5 per cent earlier.

The state has planned to rationalise 14 subsidies which benefit hotels and large commercial establishments. The CM informed the media that they have decided to remove the subsidised electricity for hotel owners. The state will now provide a 50 per subsidy on the bus fares to women. CM Sukhu stated that the BJP government made electricity free for all, even the taxpayers across Himachal Pradesh and gave free travel facilities to women on 3,000 state roadways buses.

The state is struggling on the financial front due to excessive borrowing, insufficient revenue generation as well as the rising costs of salaries and pensions. As per the media reports, the state’s decision to revive the old pension scheme (OPS) which involves payment of Rs 1,500 to women has contributed to the financial problems of the state.