Shimla, September 3 (Daily Kiran) : A report released by the Comptroller and Auditor General (CAG) on September 3, 2026, paints a troubling picture of the financial situation in Himachal Pradesh. The CAG highlighted the rapidly increasing debt burden, violations of fiscal deficit limits, and dwindling funds for development and capital expenditure.
In the report presented by Chief Minister Sukhu in the state assembly, it was revealed that the fiscal deficit of the state has surpassed the limits set under the Fiscal Responsibility and Budget Management (FRBM) framework. The revenue deficit stood at ₹6,804.61 crore, while the fiscal deficit reached ₹12,611.05 crore, amounting to 5.44% of the Gross State Domestic Product (GSDP).
The report indicates that the state government has failed to control these deficits within the targets prescribed by the FRBM Act. Furthermore, the state’s outstanding liabilities are significantly higher than the goals recommended by the 15th Finance Commission and the state’s own budget estimates.
The audit report emphasized that approximately 86% of the total revenue collected by the state is being spent on committed expenditures and subsidies, leaving minimal funds available for infrastructure development and capital investment. Notably, nearly 70% of the revenue expenditure is allocated solely to salaries, pensions, and gratuities.
The CAG also expressed concerns over the rising costs associated with electricity subsidies and debt relief measures, stating that such commitments are placing additional pressure on the state’s financial health. With only 14% of revenue resources remaining for developmental activities and capital expenditure, the state faces significant barriers to infrastructure construction and long-term investments.
Despite these challenges, the economy of Himachal Pradesh recorded a growth rate of 9.20% during 2024-25. However, the state’s contribution to India’s Gross Domestic Product (GDP) remains a mere 0.70%, showing a decline over the past five years, a trend that has raised alarms for the national auditor.
Revenue collection in the state increased by 4.34%, driven by Goods and Services Tax (GST) collections and contributions from central taxes. Non-tax revenue also saw a significant rise of 22.40%. Despite some improvements in revenue sources, the CAG noted that Himachal Pradesh remains heavily reliant on grants from the central government.
The report also uncovered some irregularities in the management of government funds, highlighting that funds collected from levies such as milk cess, environment cess, and building and other construction workers’ welfare cess were kept outside the government account.
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