In March 2025, Chief Minister (CM) Himachal Pradesh (HP) Sukhvinder Singh Sukhu, who also holds the finance portfolio, presented a tax-free budget for the Financial Year 2025-26 (FY 26) of Rs 58,514 crore, marking an increase of Rs 70 crore from the previous fiscal year’s Rs 58,444 crore.
- The budget aims to strengthen the economy, support farmers and workers, improve tourism, and modernize infrastructure while addressing financial challenges.
Financial Indicators:
i.For FY 26, total revenue receipts are estimated at Rs 42,342.97 crore, while capital receipts will be Rs 14,602.37 crore, including Rs 13,374.74 crore from public debt and Rs 1,200.00 crore from the provident fund (PF). This brings total receipts to Rs 56,945.34 crore.
ii.On the expenditure side, revenue expenditure is Rs 48,733.04 crore, while capital expenditure (CapEx) is Rs 3,941.13 crore. Rs 34.40 crore will be spent on loans, and Rs 5,805.74 crore on public debt repayments, making total expenditure Rs 58,514.31 crore.
iii.The Revenue Deficit(RD) is projected at Rs 6,390.07 crore, and the Fiscal Deficit (FD)at Rs 10,337.97 crore which is 4.04% of the state’s Gross Domestic Product (GDP).
iv.The state’s debt has increased to Rs 1,04,729 crore, with Rs 29,046 crore borrowed by the current government. The state expects to generate over Rs 3,000 crore in additional revenue.
Points to Note:
i. The government aims to retrieve Rs 9,000 crore from the Centre under the National Pension Scheme (NPS). The Revenue Deficit Grant (RDG)has declined to Rs.3,257 crore in FY26 from Rs.62,58 crore last yea Since the introduction of Goods and Services Tax (GST) the state has suffered a revenue loss of Rs 9,478 crore, despite receiving GST compensation.
ii Of every rupee spent, 25 paise is used for salaries, while 20 paise goes towards pensions. Interest payments take up 12 paise, and 10 paise is allocated for debt repayment. Additionally, 9 paise is given as grants to autonomous bodies, leaving only 24 paise for development projects.
Key Initiatives:
i.The government aims to strengthen farmers’ livelihoods by bringing one lakh more farmers into natural farming in FY26, adding to the 1.58 lakh farmers already practicing it. To support turmeric growers, a minimum support price (MSP) of Rs 90 per kg has been set for raw turmeric (kachi haldi).
- Turmeric cultivation will be promoted under the Mukhyamantri Fasal Suraksha Yojana(MFSY). Additionally, a Spice Park will be established in Hamirpur, HP.
ii.The government announced a price increase for milk to support dairy farmers:
Cow milk price will rise from Rs 45 to Rs 51 per litre. Buffalo milk price will increase from Rs 55 to Rs 61 per litre.
iii.The daily wages under Mahatma Gandhi National Rural Employment Guarantee Act, 2005 (MGNREGA) have been increased from Rs 300 to Rs 320 per day.
iv.Several schemes for women, children, disabled individuals, and agriculturists have been announced, and separate directorates for schools and colleges will be established.
- Financial assistance of Rs 1,500 will be provided to Women who turn 21 between January 1, 2025, and March 31, 2026, as well as those employed in others’ homes from June 1, 2025, along with their eligible daughters, under the ‘Indira Gandhi Pyari Behna Sukh Samman Nidhi Yojana’.
v.The government plans to promote religious tourism and develop lesser-known destinations, including transforming tea estates into eco-tourism sites. In addition, 500 electric (e) buses will be purchased, and the Shimla Ropeway Project in Shimla, HP will be launched in FY26.
vi.Special Task Force(STF) will be formed to tackle the growing issue of drug abuse in the state. 25,000 government jobs to be created, mainly in the health and the education sector.
vii.The state government announced a 3% increase in Dearness Allowance for government employees and confirmed the clearance of pending arrears for pensioners aged 70 and above.
About Himachal Pradesh (HP):
Chief Minister (CM)– Sukhvinder Singh Sukhu
Governor– Shiv Pratap Shukla
Capital– Shimla (Summer Capital), Dharamsala (Winter Capital)
National Park (NP)- Great Himalayan NP, Khirganga NP
