Himachal Pradesh’s Chief Minister, Sukhvinder Singh Sukhu, recently unveiled the annual budget for the fiscal year 2025-26, which totals a whopping Rs 58,514 crore. This budget puts a strong focus on boosting tourism, enhancing rural development, and promoting green energy. It also tackles some financial hurdles, including a cut in the Revenue Deficit Grant and the end of GST compensation.
Financial Challenges and Debt Liability
While unveiling his third budget, CM Sukhu shed light on the tough financial challenges the state is grappling with. The Revenue Deficit Grant (RDG) has seen a drastic cut, plummeting from Rs 10,949 crore in 2021-22 down to just Rs 3,257 crore by 2025-26. To make matters worse, Himachal Pradesh has already faced a staggering loss of Rs 9,478 crore up until 2023-24, all thanks to the central government halting GST compensation.
The state’s debt has now reached a staggering Rs 1,04,729 crore, with Rs 29,046 crore borrowed during the current government’s term. Alarmingly, 70% of this debt has been used to pay off earlier loans and interest, leaving only Rs 8,093 crore for new development projects.
Boosting Tourism: Religious and Eco-Tourism Focus
Tourism is getting a significant boost in the budget this year. The government is focusing on promoting both religious tourism and eco-tourism, while also shining a light on some hidden gem destinations. Plus, there are plans to transform tea estates into eco-tourism hubs to draw in more visitors.
- Eco-Tourism Expansion: Seven eco-tourism sites were allocated in 2024, and 78 new eco-tourism sites will be allocated in the next phase.
- Revenue Generation: The government anticipates revenue of Rs 200 crore over the next five years through eco-tourism initiatives.
Green Energy and Environmental Conservation
CM Sukhu emphasized that the forest cover in Himachal Pradesh serves as the “lungs of North India,” playing a crucial role in providing essential ecological services like soil conservation, water purification, clean air, and climate stability. These services are estimated to be worth around Rs 90,000 crore each year. The government is currently making its case to the 16th Finance Commission, seeking financial backing for its environmental efforts. On top of that, there are plans to introduce 500 electric buses in 2025-26 to help cut down on carbon emissions. The Shimla Ropeway Project is also set to kick off in the next fiscal year, aimed at promoting sustainable urban transport.
Support for Farmers and Agriculture
The government has introduced multiple schemes to benefit farmers and agriculturalists:
- Increase in Milk MSP:
- Cow milk: From Rs 45 to Rs 51 per litre
- Buffalo milk: From Rs 55 to Rs 61 per litre
- Natural Farming: A target of bringing one lakh farmers under natural farming has been set for 2025-26. So far, 1.58 lakh farmers have adopted this practice.
- MSP for Raw Turmeric: Farmers growing kachi haldi (raw turmeric) naturally will receive an MSP of Rs 90 per kg.
- Spice Park in Hamirpur: The state will set up a Spice Park in Hamirpur to boost spice farming and processing.
Employment and Wage Hike
The budget also brings good news for workers engaged in the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
- Daily wage increased by Rs 20, from Rs 300 to Rs 320 per day.
- Several new schemes for employment generation will be introduced, focusing on rural development and infrastructure.
Social Welfare Initiatives
CM Sukhu announced several schemes benefiting pensioners, women, disabled individuals, and children:
- Pension Arrears for Senior Citizens:
- Pensioners aged 70-75 years will receive their arrears in May 2025.
- The previous BJP government left liabilities of Rs 10,000 crore related to government employee arrears.
- New Directorates for Education: Separate Directorates for Schools and Colleges will be established to streamline educational governance and policy-making.
Combating Drug Abuse and Organized Crime
To address the rising concern of drug abuse and organized crime in the state, the government has announced the following measures:
- Special Task Force (STF) to be formed for tackling drug-related issues.
- Introduction of the Himachal Pradesh Prevention of Continuing Unlawful Activity and Control of Organized Crime Act, 2025, aimed at preventing illegal activities and organized crime.
