Himachal Pradesh Headed For Debt Trap: CAG Report Released!

Shimla April, 1; A report by the Comptroller and Auditor General of India (CAG) has warned that Himachal Pradesh could fall into a “debt trap”, as the state’s public debt rose to Rs 27,910 crore in the previous financial year.

The report, tabled in the Himachal Pradesh assembly on Friday, revealed that the state was required to pay 62% of this debt within 7 years. The report has revealed that the overall fiscal liabilities of Himachal Pradesh increased by Rs 12,969 crore (46%) in four financial years, from Rs 28,228 crore in 2011-12 to Rs 41,197 crore in 2015-16. It said interest payments increased by 48% in the same period, from Rs 2,130 crore in 2011-12 to Rs 3,155 crore in 2015-16, and by Rs 306 crore (11%) over the previous year.\

Public debt increased from Rs 19,511 crore in 2011-12 to Rs 27,910 crore in 2015-16, registering an annual average growth rate of 8.42%. It said share of market borrowings in total public debt went up from 52% in 2011-12 to 60% in 2015-16.

In this fiscal, the total public debt increased by 8.48% over the previous year. The maturity profile of the state debt indicates that 8%, or Rs 2,268 crore, of public debt is payable in the next year, while 38%, or Rs 10,567 crore, of it is payable in the next one to five years. The remaining 54% (Rs 15,075 crore) of public debt is required to be paid in more than five years.

According to the report, almost 15-16% revenue receipts of the state were used for Interest payments from 201112 to 2015-16. In 2015-16, interest payments accounted for 13.46% of revenue receipts. Per capita debt increased from Rs 40,904 in 2011-12 to Rs 57,642 during the 2015-16 fiscal, an increase of 41%. Over the previous year, the per capita debt increased by Rs 3,729.