HP Budget: CM Sukhu defers salaries, cuts budget amid fiscal crisis

Himachal Pradesh CM Sukhvinder Singh Sukhu announced major austerity measures, deferring salaries for ministers and officials for six months. The 2026-27 budget size has been cut by Rs 3,586 crore to tackle severe financial challenges.

In a major austerity push, Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu on Friday announced a six-month deferment of salaries for ministers, legislators and senior officials, along with Rs 3,586 crore reduction in the overall budget size.

The Chief Minister, who presented the 2026-27 budget in the state assembly, sought support of all sections and said the state will move towards self-reliance. The total budget outlay has been reduced from Rs 58,514 crore in 2025-26 to Rs 54,928 crore for 2026-27, reflecting what the Chief Minister described as "extraordinary financial challenges" following the discontinuation of the Revenue Deficit Grant (RDG) by the Centre.

Stringent Expenditure Control Measures

"We are working for the state and its people, not for elections. I seek six months' support from all sections, and I assure that Himachal Pradesh will move towards self-reliance," Sukhu said. Announcing stringent expenditure control measures, the Chief Minister said that 50% of his salary, 30% of ministers' salaries and 20% of MLAs' salaries would be deferred for six months, while senior bureaucrats, including the Chief Secretary, Additional Chief Secretaries, Secretaries and DGP-rank officers, would see a 30% deferment, and other officials 20%. Police officers from ADGP to DIG rank would also face 30% deferment, SP-level officers 20%, and other staff 20%, while the planned 3% salary increment for employees would be deferred for six months, with Group D employees not receiving the increase during this period. The government also indicated that it may appeal to the judiciary for similar voluntary deferment measures.

The budget presentation witnessed disruptions, with opposition members staging protests and entering the well of the House, leading to interruptions and a brief adjournment. Proceedings resumed after nearly 30 minutes, and the Chief Minister continued his address, reading the 134-page budget speech for about four hours.

Fiscal Challenges and Revenue Concerns

Highlighting revenue concerns, Sukhu blamed the Centre for discontinuing the RDG, terming it a major setback. "We should have been given a green bonus. Instead, the Revenue Deficit Grant has been stopped, putting additional pressure on the state." He also flagged pending dues of around Rs 7,000 crore under BBMB and GST compensation, estimated losses of Rs 25,000 crore due to GST rationalization and a rising debt burden, asserting that the government would move away from populist decisions and focus on fiscal consolidation.

Welfare Schemes and Development

Despite financial constraints, the government reiterated its commitment to fulfilling election guarantees in a phased manner, announcing Rs 500 crore for over 300 pending development works in rural sectors and launching the "Mukhyamantri Apna Sukhi Parivar Yojana" to benefit one lakh poor families, including 300 units of free electricity and phased financial assistance. Social security measures were expanded, including increasing pensions for visually impaired persons up to Rs 3,000 per month, while Rs 1,544 crore was allocated for women, child development and social welfare.

Boost for Agriculture and Allied Sectors

In agriculture and allied sectors, the budget focused on strengthening the rural economy by increasing MSPs for key crops, allocating Rs 734 crore for animal husbandry, announcing a State Kisan Commission, and launching a Rs 300 crore scheme for nomadic communities, along with Rs 62 crore for poultry development and a push for natural farming under the Rajiv Gandhi Prakrit Krishi Yojana.

Fisheries Sector Initiatives

The fisheries sector will see the launch of the Mukhyamantri Fishermen Scheme with subsidies on equipment and infrastructure, along with the establishment of an Integrated Aqua Park in Nadaun and annual support for fishermen.

Focus on Key Economic Drivers

Tourism Promotion

Tourism, contributing 7.78% to GSDP, received a boost through PPP-based promotion, digital systems, expansion of Kangra airport, and development of eco-tourism, ropeways and film policy incentives.

Employment and Industry

Employment and industry measures include 500 campus placement drives, overseas job opportunities for youth, subsidies for e-vehicles, a new industrial policy, and the proposed cyber city at Waknaghat along with AI and data science initiatives.

Reforms in Public Services

Education and Governance

In education and governance, the government announced the introduction of four-year undergraduate programmes, expansion of CBSE curriculum, a ban on mobile phones in schools, and AI-enabled citizen services.

Health Sector Modernisation

The health sector received an allocation of Rs 2,868 crore, including modernisation of medical colleges, ICU expansion, robotic surgery facilities, and tele-oncology services.

Urban Development

Urban development plans include a Rs 400 crore Central Business District project in Shimla, Rs 200 crore in Hamirpur, 24x7 water supply in Shimla, and the establishment of water purification centres.

Green and Social Initiatives

The budget also emphasised green initiatives such as electric buses, carbon tourism parks and biodiversity conservation, while social initiatives include anti-drug programmes, orphan care facilities, and recruitment of women police officers.

Reiterating his government's resolve, Sukhu said, "The people of Himachal are as strong as the mountains. We will take tough decisions, secure our rights, and ensure sustainable development despite financial challenges."

The budget reflects a combination of austerity measures and targeted welfare spending as the state seeks to manage fiscal stress while sustaining development and social commitments. (ANI)

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