New Delhi, Nov. 9 -- On 8 September, Himachal Pradesh chief minister Sukhvinder Singh Sukhu asked central finance minister Nirmala Sitharaman to let his state borrow more. A state's yearly borrowing is capped at 3% of its gross state domestic product (GSDP), which is the value of everything its economy produces in a year, and Sukhu wanted 4%. He needed the room, Mint reported, to meet the state's "committed liabilities" (bills it cannot avoid) and to fund services and development.

Every five years, a constitutional Finance Commission advises how the Centre shares tax money with states. States that still cannot meet day-to-day costs after that share may get a yearly top-up, or the revenue deficit grant.

Himachal Pradesh, one of 17 states...