Himachal Pradesh in financial crisis: HC orders closure of 18 state-run hotels over unpaid electricity bills

By Vinaykumar Patil | First Published Nov 22, 2024, 10:06 AM IST

Himachal Pradesh faces a severe financial crisis with ₹95,000 crore debt due to welfare schemes. The High Court ordered the closure of 18 loss-making state-run hotels and the sale of Himachal Bhawan to recover Rs 150 crore in electricity dues, highlighting governance and fiscal challenges.

The Congress government in Himachal Pradesh is grappling with a severe financial crisis after implementing several popular schemes, including free electricity. Ironically, the state now finds itself unable to pay electricity bills for its establishments, leading to significant repercussions.

In a stern move, the Himachal Pradesh High Court has ordered the closure of 18 state-run hotels managed by the Himachal Pradesh Tourism Development Corporation (HPTDC). These hotels, described as "white swans" due to their unproductiveness, have been underperforming due to poor maintenance and mounting losses. The court has also directed the seizure and sale of Himachal Bhawan Hotel in Delhi to recover outstanding electricity dues amounting to Rs 150 crore.

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The court observed that allowing public funds to be wasted on loss-making ventures is unjustifiable. It emphasized the urgent need to shut down unviable hotels by November 25, protecting taxpayer money from further misuse.

The state government’s debt has ballooned to over ₹95,000 crore, largely attributed to the cost of implementing various welfare schemes. These include promises of free electricity, pensions, and other guarantees. This financial strain has resulted in delays in paying salaries and pensions to government employees and retirees. Recently, the government altered the payment dates for salaries and pensions to manage its dwindling funds.

Even top officials, including the Chief Minister and ministers, have faced postponed salary disbursals. To cut costs, the government has reduced free electricity benefits and decided to stop pensions for legislators dismissed under the Defection Act.

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Many of the state-run hotels under HPTDC’s purview have become liabilities due to neglect and lack of upkeep. Despite their potential as revenue-generating assets, these establishments have failed to thrive, compounding the state’s economic troubles. The High Court’s directive underscores the urgency to address these inefficiencies and prevent further financial haemorrhaging.

Himachal Pradesh’s financial distress is a cautionary tale of balancing welfare initiatives with sustainable governance. While popular schemes may bring short-term relief, their long-term impact on the state’s economy is evident. The government now faces the dual challenge of reviving its financial health while maintaining public trust.

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