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Himachal budget: Sukhu clips outlay by ₹3,586cr, defers salaries to tackle fiscal crisis
CM announces 50% pay cut for self and 30% for ministers as state budget shrinks to ₹54,928cr following withdrawal of central grants.
In a major austerity push, Himachal Pradesh chief minister Sukhvinder Singh Sukhu on Friday announced a six-month deferment of salaries for himself, his cabinet, and senior officials. Presenting a tightened ₹54,928 crore budget for 2026-27, Sukhu reduced the overall outlay by ₹3,586 crore compared to the previous year, citing “extraordinary financial challenges” triggered by the Centre’s discontinuation of the Revenue Deficit Grant (RDG).
The chief minister announced that 50% of his own salary, 30% for ministers, and 20% for MLAs would be deferred. The move extends to the bureaucracy, with the chief secretary, director general of police, and other senior officers facing a 30% deferment, while mid-level officers and the police force will see a 20% cut. Furthermore, a planned 3% salary increment for state employees has been stayed for six months.
Sukhu clarified that no salary cuts have been imposed on employees.
“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
Fiscal consolidation
Attributing the crisis to the cessation of the RDG, Sukhu noted that the state is also battling a rising debt burden and pending dues of ₹7,000 crore under GST compensation and BBMB. “We are working for the state, not for elections,” Sukhu said, asserting that the government would pivot from populist measures toward fiscal discipline. He urged the judiciary to consider similar voluntary deferments. Despite the squeeze, the government allocated ₹500 crore for rural development and launched the ‘Mukhyamantri Apna Sukhi Parivar Yojana’ to provide 300 units of free power and financial aid to one lakh underprivileged families.
Sectoral growth, infra push
The budget prioritises the rural economy with a ₹734 crore allocation for animal husbandry and the establishment of a State Kisan Commission. In the tourism sector, which contributes nearly 8% to the GSDP, the government plans to expand Kangra airport and promote eco-tourism via public-private partnerships.
Major infrastructure projects include a ₹400 crore Central Business District in Shimla and a 24x7 water supply scheme for the capital. To bolster employment, the state proposed a cyber city at Waknaghat and 500 campus placement drives, alongside a new industrial policy focusing on AI and data science.
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.
The health sector received an allocation of ₹2,868 crore, for betterments, including modernisation of medical colleges, ICU expansion, robotic surgery facilities, and tele-oncology services.
Milk procurement prices have been hiked by ₹10; cow milk to be bought for ₹61 per litre, buffalo milk for ₹71.
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.
Sidelights
Green wheels for ‘Green Budget’
Breaking from his tradition of driving his iconic Maruti Alto to the Vidhan Sabha on budget day, chief minister Sukhvinder Singh Sukhu arrived in an electric vehicle (EV) this year. The move was intended to signal the government’s shift toward a ‘Green Budget’, emphasising eco-friendly infrastructure and a rejuvenated rural economy.
Uproar in House
In an unprecedented move, BJP legislators disrupted the chief minister’s speech, alleging the use of unparliamentary language against the Opposition. The session took a volatile turn as BJP members stormed the well of the House, raising slogans and likening the state government’s functioning to a “Hitler-style” dictatorship.
Marathon address
Despite the significant cut in the state’s overall outlay, the chief minister’s budget speech was a sprawling134-page document. For the first time in the history of the Himachal assembly, the House was forced to break for lunch mid-speech. The marathon address lasted four hours, setting a new record for the longest budget presentation in the state. In his four hour long speech, Sukhu recited 15 shayaris.
