Long-Term Fiscal Sustainability Implications of Pension Liabilities in Himachal Pradesh: A Trend and Fiscal Stress Analysis

Author

Dr. Anil Kumar


Abstract

 In this paper an attempt has been made to analyze the growth and trends in revenue expenditure, pension expenditure, and Gross State Domestic Product (GSDP) in Himachal Pradesh for the period 2014-15 to 2024-25. It has also been analyzed that whether pension liabilities are growing faster than the government’s expenditure capacity in Himachal Pradesh with the help of ratio analysis, compound growth rate (CGR), and a Fiscal Stress Ratio (FSR), The findings reveal that pension expenditure grew at a CGR of 12.75 percent per annum, significantly higher than the growth in revenue expenditure (9.43 percent, per annum) and GSDP (7.90 percent, per annum). The findings further show that the pension share in revenue expenditure increased from 14.73 percent in 2014–15 to 21.36 percent in 2024–25, while in Gross State Domestic Product (GSDP) burden of pension expenditure rose from 2.34 percent to 3.75 percent. The estimated Fiscal Stress Ratio (1.35) indicates that pension liabilities are expanding considerably faster than the expenditure base, posing a warning signal for long-term fiscal sustainability in Himachal Pradesh. 



Keywords

Fiscal Sustainability, Pension Expenditure, Revenue Expenditure, Himachal Pradesh.



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References


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