The state of Himachal Pradesh known for its beautiful landscape is going through a turbulent phase as it faces one of its biggest financial crises ever, with the state government delaying salaries of its employees and rethinking its plan to continue with its freebies.
The situation is reminiscent of the financial mess created because of misgovernance and the freebie culture that led to financial crises in Karnataka, Punjab and now in Himachal Pradesh.
The state's poor fiscal condition has been caused by rising salary and pension costs, reduction in Central aid, insufficient revenue generation for the lack of industries, revival of the Old Pension Scheme (OPS), welfare and freebie policies such as delivering Rs 1,500 to women and providing free power. All this blended together contributed to the ongoing financial strain.
An economic analyst based in Himachal Pradesh told The Sunday Guardian that "A crisis was already brewing, which has now exploded. We are not an industrial state where we can create a huge amount of revenue from industries.
We have one of the largest salaried classes here and a major chunk of our budget goes to these salaried classes and pensioners." He further said that the freebie and welfare policies that usually attract a lot of attention because of the political benefits these provide, have become a matter of concern in this Congress-ruled state because these are putting a lot of financial burden on the state's exchequer.
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