Shimla: Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu on Monday presented the state’s annual Budget for 2025-26, amounting to Rs 58,514 crore, with a strong focus on tourism, rural development, and green energy. However, Sukhu acknowledged the financial challenges ahead, citing a reduction in the Revenue Deficit Grant (RDG) and the withdrawal of GST compensation by the central government.
“The coming fiscal year poses significant financial hurdles, but our government is committed to ensuring sustainable economic growth,” Sukhu said while presenting his third Budget.
Fiscal Challenges and Rising Debt
The state’s RDG has seen a sharp decline from Rs 10,949 crore in 2021-22 to Rs 3,257 crore in 2025-26. Himachal Pradesh has already suffered a loss of Rs 9,478 crore due to the discontinuation of GST compensation, he added.
The debt liability of the state has surged to Rs 1,04,729 crore, with Rs 29,046 crore borrowed by the current government. Sukhu clarified that 70% of the loans taken in the past two years were used to repay debts accrued under the previous administration, leaving only Rs 8,093 crore for developmental projects.
Tourism and Green Initiatives
Tourism emerged as a key priority in the Budget. The government aims to boost religious and eco-tourism while developing lesser-known destinations. Notably, tea estates will be transformed into eco-tourism hubs.
In 2024, operators were selected for seven eco-tourism sites. Moving forward, 78 additional eco-tourism sites will be allocated, with an expected revenue generation of Rs 200 crore over the next five years.
The government is also advocating for financial recognition of Himachal’s ecological contributions. “The forest cover in our state acts as the lungs of North India, providing soil, water, clean air, and a favorable climate, estimated to be worth Rs 90,000 crore annually,” Sukhu stated. The state is pushing for due compensation from the 16th Finance Commission for these environmental services.
Support for Farmers and Rural Workers
The Budget includes several measures to support farmers and rural workers. The minimum support price (MSP) for cow milk has been increased from Rs 45 to Rs 51 per liter, while buffalo milk will now fetch Rs 61 per liter, up from Rs 55.
A major push is being given to natural farming, with a target of enrolling one lakh farmers in 2025-26. Already, 1.58 lakh farmers have adopted this method. Additionally, raw turmeric (kachi haldi) cultivated using natural methods will now have an MSP of Rs 90 per kg. A Spice Park is planned in Hamirpur to support turmeric and spice growers.
Daily wages under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) have also been increased by Rs 20, raising the amount from Rs 300 to Rs 320 per day.
Tackling Drug Abuse and Crime
Addressing the growing concern of drug abuse, the CM announced the formation of a Special Task Force (STF) to combat the menace. Additionally, the state will introduce the Himachal Pradesh Prevention of Continuing Unlawful Activity and Control of Organised Crime Act, 2025, to tackle organized crime.
Transport and Infrastructure Boost
In a bid to promote sustainable transport, the government plans to procure 500 electric buses in the coming fiscal year. Additionally, work on the much-anticipated Shimla Ropeway project will commence in 2025-26, further boosting the state’s eco-friendly transport network.
Support for Pensioners, Women, and Education
The government has also prioritized pensioners, with arrears for those aged 70-75 set to be disbursed in May. Sukhu also highlighted that liabilities of around Rs 10,000 crore in pending government employee arrears were left behind by the previous administration.
To enhance education, separate directorates will be established for schools and colleges, ensuring better governance and resource allocation. Several welfare schemes for women, children, and disabled individuals were also announced.
Despite the financial challenges, Sukhu reiterated his government’s commitment to development, rural empowerment, and green initiatives, positioning the Budget as a roadmap for sustainable growth.
