Himachal Pradesh Budget 2025-26: A Focus on Tourism, Rural Development, and Green Energy

Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu presented the annual budget for FY 2025-26, amounting to Rs 58,514 crore. The budget emphasizes tourism, rural development, and green energy, while also addressing financial challenges such as a reduction in the Revenue Deficit Grant and the withdrawal of GST compensation.

Financial Challenges and Debt Liability

While presenting his third budget, CM Sukhu highlighted the financial difficulties faced by the state. The Revenue Deficit Grant (RDG) has been reduced significantly from Rs 10,949 crore in 2021-22 to Rs 3,257 crore in 2025-26. Himachal Pradesh has already incurred a loss of Rs 9,478 crore till 2023-24 due to the cessation of GST compensation by the central government.

The state’s debt liability has risen to Rs 1,04,729 crore, with Rs 29,046 crore borrowed under the present government. Of this, 70% was spent on repaying previous loans and interest, while only Rs 8,093 crore was allocated to developmental projects.

Boosting Tourism: Religious and Eco-Tourism Focus

Tourism has been given a major push in the budget. The government aims to promote religious tourism and eco-tourism, as well as explore lesser-known tourist destinations. Additionally, tea estates will be developed into eco-tourism hubs to attract 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 stressed that Himachal Pradesh’s forest cover acts as the “lungs of North India” by providing vital ecological services, including soil conservation, water purification, clean air, and climate stability. The estimated value of these services is Rs 90,000 crore annually. The government is presenting its case before the 16th Finance Commission to seek financial support for its environmental contributions.

Additionally, the government plans to purchase 500 electric buses in 2025-26 to reduce carbon emissions. The Shimla Ropeway Project will also be launched in the next fiscal year to promote sustainable urban transport.

Support for Farmers and Agriculture

The government has introduced multiple schemes to benefit farmers and agriculturalists:

• Increase in Milk MSP:

1. Cow milk: From Rs 45 to Rs 51 per litre
2. 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:

1. Pensioners aged 70-75 years will receive their arrears in May 2025.
2. 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.

Summary of Key Budget Announcements

Aspect	Details
Budget Size	Rs 58,514 crore for FY 2025-26
Financial Challenges	Revenue Deficit Grant reduced to Rs 3,257 crore; Loss of Rs 9,478 crore due to GST compensation withdrawal
State Debt	Rs 1,04,729 crore total debt; Rs 29,046 crore borrowed by present government
Tourism Boost	78 new eco-tourism sites planned; Tea estates to be developed as eco-tourism destinations
Green Energy	500 electric buses to be purchased; Shimla Ropeway Project to start in FY26
Environmental Conservation	Himachal Pradesh’s ecological services valued at Rs 90,000 crore annually
Farmers’ Support	Milk MSP Hike: Cow milk Rs 51/litre, Buffalo milk Rs 61/litre; 1 lakh farmers to be included in natural farming
Spice Park	To be set up in Hamirpur for promoting spice farming
Wage Hike (MGNREGA)	Increased from Rs 300 to Rs 320 per day
Senior Citizen Pension	Pension arrears for 70-75 years age group to be cleared in May 2025
Crime Prevention	STF for drug abuse; New Organized Crime Act 2025 to be introduced