Himachal's fiscal condition is a lesson for states in what not to do

Rising competitive populism among states could seriously undermine India's long-term potential

Himachal Pradesh is facing significant financial difficulties, which not only expose the state’s ailing fiscal health but have also triggered a political slugfest between the Congress-ruled state government and the key Opposition party — the Bharatiya Janata Party. The economic distress in the state can be attributed largely to heavy borrowing, rising pension and salary budgets, the provision of freebies, and insufficient revenue generation. At Rs 1.17 lakh, Himachal Pradesh has the highest per capita debt in the country after Arunachal Pradesh. In fact, the state’s outstanding debt has ballooned from 37 per cent of gross state