Shimla, March 13,
Himachal Pradesh’s financial position remains precarious, with a staggering 57% of its ₹53,413 crore budget for the fiscal year 2023-24 locked into committed liabilities, leaving little room for developmental initiatives. This was revealed in the Econimic tabled in the Budget session of the Himachal Vidhan sabha here today. ₹30,400 crore is pre-allocated to fixed expenditures, including salaries, pensions, and interest payments — severely limiting the state’s financial flexibility.
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The breakdown of these fixed costs shows that ₹16,144 crore, or 30.2% of the total budget, is earmarked for salaries. Pensions take up ₹8,694 crore, accounting for 16.3% of the budget, while interest payments on the state’s borrowings amount to ₹5,562 crore, making up 10.4% of the total outlay.
The financial health of Himachal Pradesh faces further challenge, as the state grapples with declining central grants and increasing expenditure pressures, reveals the survey. In the fiscal year 2023-24 (BE), the grant from the Centre accounted for just 25% of the state’s total receipts—equivalent to the percentage of the state’s own tax revenue to total receipts. This marks a steep decline of 12.4 percentage points compared to FY 2021-22 (A) when it was Rs 15940 Cr.
Growth of Major Fiscal Indicators of the State shows that in FY 2023-24(BE), in the tax revenue there is a highest growth of 14.69 per cent, followed by the non-tax revenue which is estimated at 14.02 per cent. There is a negative growth of 15.04, 5.35 and 17.57 per cent in total expenditure, revenue expenditure and capital expenditure respectively during the FY 2023-24.
State revenue receipts for FY 2023-24 (BE) stood at 18.32% of the Gross State Domestic Product (GSDP), a noticeable drop from 21.67% in FY 2021-22 (A). Economic services, including electricity, gas, and water supply, remained the highest-contributing component of non-tax revenue, forming 4.6% of the state’s total receipts.
The total expenditure of the state government was projected at ₹53,413 crore, with revenue expenditure consuming a substantial ₹42,704 crore—accounting for 79.95% of the total outlay. Capital expenditure was allocated a modest 9.74% share, highlighting the state’s limited scope for developmental spending. The committed expenditure of ₹30,400 crore represented 56.92% of total expenditure and 14.66% of the GSDP, further constraining fiscal flexibility.
Despite efforts to manage the fiscal deficit, the state’s debt-to-GSDP ratio stood at 37.02% in FY 2021-22, underscoring the rising debt burden. Even though the debt figures are listed till 2021-22 in the Economic survey but only payment of interest on loans amounted to Rs 5562 Cr in 2023-24 compared to Rs 4,641 in 2021-22, evidently indicates the rise in debt burden.
The gender budget expenditure for FY 2023-24 (BE) was pegged at ₹4,302 crore, reflecting the government’s focus on inclusive development.
Research and development (R&D) spending was estimated at ₹1,024 crore on the revenue account and ₹93.21 crore on the capital account, indicating a continued commitment to innovation and infrastructure development.
Financial experts feel that though the implementation of the Fiscal Responsibility and Budget Management Act, 2003, has guided the state’s efforts toward maintaining fiscal discipline. But, the declining share of central grants and rising committed expenditures call for strategic reforms to ensure sustainable economic growth and development in the years ahead.
