Shimla, May 9 -- Amid mounting fiscal stress following the discontinuation of the Revenue Deficit Grant (RDG), the state government is set to raise loan of Rs.500 crore through government securities.

The borrowing comes at a time when the state government has initiated an exercise to streamline the administrative structure and reduce expenditure by proposing downsizing cadre strength of All India Services, including IAS, IPS and IFS officers.

Government securities, commonly known as G-sect, are debt instruments issued by the governments to raise funds from the market.

Officials say that the state has been facing "extraordinary financial challenges" with the discontinuation of the RDG burning a hole of Rs.8,000- Rs.10,000 crore annually...