Economics • Indian EconomyMedium
In analyzing the fiscal deficit trends of Himachal Pradesh, which factor frequently exerts severe pressure on the state's non-developmental expenditure budget?
A. Excessive spending on international space exploration programs
B. High wage and pension liabilities coupled with debt servicing costs arising from hilly terrain administration✓ Correct Answer
C. Surplus revenues generated from coastal shipping royalties
D. Absence of any public sector workforce
💡 Solution & Explanation
State finances face structural rigidity due to substantial commitments toward government salaries, pensions, and debt servicing necessitated by administrative expansion across difficult terrain. Coastal shipping and space exploration are irrelevant to state budgetary outlays. Fiscal consolidation strategies focus on optimizing non-developmental outlays and enhancing tax collections.
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