The Himachal Pradesh government will raise a fresh loan of Rs 500 crore during the current financial year 2026-27 to meet its developmental expenditure amid mounting fiscal pressure on the state exchequer.
According to a notification issued by the Finance Department, the loan proceeds will be utilised for various development programmes. The Centre has granted consent for the borrowing under Article 293(3) of the Constitution of India. The loan will carry an interest rate of 7.81 per cent and will be repaid after ten years by 2036.
This is the second major borrowing by the state in the new financial year. Earlier, on April 6, 2026, the government had raised a loan of Rs 900 crore, also for a 10-year period ending in 2036, to meet developmental requirements.
The repeated borrowings underline the worsening fiscal condition of the state, which is struggling under the burden of rising liabilities. Salaries, pensions, interest payments, loan repayments and grants for autonomous bodies consume nearly Rs 80 out of every Rs 100 spent by the government, leaving only about Rs 20 for development activities.
