‘HP cannot run on loans’

A six-time MLA, Jai Ram Thakur (61) has a strong personal and political base in the Seraj constituency of Mandi district in Himachal Pradesh. His consistent electoral success makes him one of the BJP’s most reliable leaders in the state. His elevation as the Chief Minister in 2017 marked a generational shift in Himachal Pradesh politics and the beginning of a trend where leaders from humble, grassroots backgrounds could rise to the state’s highest office.

It ended the long-standing dominance of figures in the BJP, the likes of Prem Kumar Dhumal and Shanta Kumar, and broke the two-decade political cycle that alternated between them and Virbhadra Singh. Unlike his predecessors, Thakur came from a modest rural family in Mandi district, rising through the party ranks. His ascent symbolised meritocratic leadership, grassroots connect, and a new era for Himachal’s politics.

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Even after 2022, as a leader of the opposition, Thakur has been visible and vocal, raising issues in the Assembly and in the media. His performance is generally viewed as politically effective in keeping the BJP relevant, though its long-term impact will likely be judged by whether the party regains power in the next 2027 state Assembly election. In an interview with Bhawani Negi, he spoke about the state’s fiscal health and three years of Congress governance in Himachal Pradesh.

Q: Himachal Pradesh is facing rising debt and revenue pressures. How serious is the situation, and is the state heading towards a financial emergency?

A: The financial situation of Himachal Pradesh is indeed a matter of serious concern. Over the past few years, the state’s debt burden has increased significantly, and the government is increasingly relying on borrowings to manage routine expenditure. When a government has to depend heavily on loans to meet its daily financial commitments, it indicates that the fiscal structure is under considerable stress. Today, the debt burden of the state has crossed Rs 1 lakh crore, and borrowing continues to rise rapidly.

Q: Which government policies do you believe have worsened Himachal Pradesh’s fiscal situation?

A: Several decisions taken by the present government have contributed to the growing financial pressure in Himachal Pradesh. One major issue is the increasing dependence on loans to meet regular expenses. Borrowing should ideally be used for infrastructure and long-term development, but when it is used to manage day-to-day commitments, it creates a heavy burden on the state’s future finances. Another concern is the rise in taxes and levies on essential services.

Q: What are other reasons behind the current financial crisis? Do you think the politics of guarantees has worsened the state’s finances?

A: Reckless appointments have also contributed to the worsening financial situation. The appointment of Chief Parliamentary Secretaries, advisors, and Officers on Special Duty with cabinet rank appears to have been done largely to accommodate political associates. The expansion of legal offices linked to the Advocate General’s office has also increased financial liabilities for the government. The politics of guarantees has further worsened the fiscal situation. In the coming years, the situation could become even more challenging as the impact of the Old Pension Scheme (OPS) begins to be felt. I am not opposed to OPS, but when the issue was raised earlier, we had suggested waiting, as discussions were underway with the Centre and a better alternative could have been explored. There was a possibility of moving towards a Unified Pension Scheme that could have helped transfer part of the liability to the central government.

Q: How do you respond to the government’s claim that the previous BJP government left huge liabilities?

A: If we compare the borrowing trends of previous governments in the state, the loan-taking percentage during former Congress Chief Minister Virbhadra Singh’s tenure from 2013 to 2017 was around 10 per cent. A similar pattern was seen during the tenure of former Chief Minister Prem Kumar Dhumal of the BJP between 2007 and 2012. However, during my tenure from 2017 to 2022, the borrowing percentage was around 7.2 per cent. Since the Sukhvinder Singh Sukhu government assumed office over the last three years, this percentage has increased to around 16.5 per cent, which is more than double. When I became Chief Minister, the debt burden inherited from the Virbhadra Singh government was about Rs 49,000 crore. By the time my tenure ended, the debt had reached around Rs 69,600 crore. Now, after three years of the Sukhu government, the debt burden has crossed the Rs 1 lakh crore mark, which means that more than Rs 40,000 crore has been added. During our tenure, the loan utilisation and interest repayment efficiency were around 95 per cent, whereas the present Congress government is not even reaching 60 per cent.

Q: Is Himachal’s fiscal crisis real, or is the government overstating for political gain?

A: We have to acknowledge that the financial condition of the state is indeed challenging. However, the steps that should have been taken to address the situation have been disappointing. It is also trying to project itself as a victim, stating the discontinuation of Revenue Deficit Grants (RDG), rather than presenting a clear and practical roadmap to strengthen the state’s finances.

Q: In your view, has the government failed to control spending or boost revenue?

A: The state government has largely failed to control expenditure. At the same time, the expected efforts to generate additional revenue have not been visible. The Finance Commission had repeatedly cautioned the state to keep expenditure under control and focus on strengthening its own resources. However, these recommendations do not appear to have been effectively implemented. The government must cut unnecessary expenditure, improve revenue generation, and bring greater transparency in financial decisions to achieve stability.

Q: The government has deferred salaries for ministers and officials as an austerity measure. Do you see this as necessary or just symbolic?

A: The decision to defer salaries appears to be an attempt to send a message to the public and project a sense of seriousness. However, in reality, it seems more aimed at appealing to public sentiment rather than addressing the core financial issues. Such steps are largely symbolic and do not make any significant difference to the overall fiscal situation. As long as a financial emergency is not imposed, the law does not permit arbitrary cuts or deferments in salaries. A similar situation arose in Andhra Pradesh during the COVID-19 period when salaries were reduced. However, the apex court later ruled against the move and directed that the deducted salaries be paid back with 6 per cent interest.

Q: How do you see the state government’s decision to impose taxes or introduce a new cess?

A: Instead of imposing additional taxes, the state government should focus on generating revenue through better economic management without burdening the public. The decision to impose a widow and orphan cess on petrol and high-speed diesel was also not a healthy step. At a time when the central government under Prime Minister Narendra Modi had reduced special additional excise duty on petrol and diesel by Rs 10 per litre each to help manage rising fuel prices amid international supply disruptions, the state government chose to increase the burden on consumers.

Q: The government argues hill states face structural disadvantages. Is a special financial package from the Centre justified?

A: Considering the present scenario, it is evident that the state needs support from the Centre. The state government should carefully plan and work out a clear case to present the situation and seek a special financial package, for which we have no objection.

Q: If the financial crisis is real, should there be an all-party consensus on economic reforms instead of playing blame games?

A: Yes, definitely. The truth is that responsibility must be fixed. Considering the state’s financial health, there should be no political appeasement in the name of guarantees. The government should place the actual financial situation before the public and then adopt adequate and responsible measures to address the challenges.

Q: As a senior BJP leader, will you raise Himachal’s financial concerns with the Centre or push for a special package?

A: Definitely. Recently, I met the Prime Minister, the Finance Minister, and the Home Minister and raised the issue of the much-needed financial assistance for the state. Just a few days ago, the state received significant support in the form of an interest-free loan of Rs 3,920 crore for 50 years under the Centre’s ‘Pride of Hills’ scheme. This shows that the Centre is responsive to the concerns of hill states like Himachal Pradesh.

Q: Centre-State relations are a key political issue. How would you assess the current ties between Himachal Pradesh and the Centre? Is the state getting adequate support?

A: Our state has consistently received strong support from the Centre. The state received Rs 25,350 crore in 2021-22, Rs 23,073 crore in 2022-23, Rs 25,815 crore in 2023-24, Rs 25,813 crore in 2024-25, Rs 26,540 crore in 2025-26, and is expected to receive Rs 25,634 crore in 2026-27. This shows that the central receipts received by Himachal during the Congress government have been consistently higher than those during our (BJP) government in 2021-22 and 2022-23. In the current financial year, the state will receive about Rs 2,500 crore more than during the final year of the BJP government, yet the Chief Minister is habitual and continues to claim that it is not receiving any support from the Centre. If we look at the figures from the 15th Finance Commission period beginning 2020-21, Himachal Pradesh received central transfers, share in central taxes, and grants under centrally-sponsored schemes. Till the last financial year ending March 31, the state had also been receiving RDG. Now, the recent ‘Pride of Hills’ scheme, a special development assistance programme of the Centre of Rs 3,920 crore in the form of an interest-free loan for 50 years, has come as a respite.

Q : How do you assess CM Sukhvinder Singh Sjukhu’s government’s performance over the past three years? Which key issues has it failed to address?

A: Apart from the rising debt burden, the state government has failed on several fronts. It has struggled to maintain law and order, while the health and education sectors have also seen significant challenges. Development activities have largely come to a standstill. Overall, the state government has not been able to effectively address several key issues over the past three years.

Q: What is your response to the Congress government’s corruption allegations against Himcare, a landmark achievement from your tenure as CM?

A: I stand by my position that there is no scope for corruption in the scheme. Himcare was developed on the lines of the Centre’s flagship Ayushman Bharat scheme to save precious lives, and it succeeded to a large extent. The allegations appear to be nothing but a planned attempt by the state government to discredit the scheme before shutting it down.