Chief Minister Sukhwinder Singh Sukhu presented the budget for the financial year 2025-26 on 17th March and announced to increase the price of cow milk from ₹45 to ₹51 per litre and the price of buffalo milk from ₹55 to ₹61 per litre, in a fresh economic jolt to the state’s people. A six rupees increase has been made to the minimum support price for cow and buffalo milk. Additionally, cattle farmers would receive a ₹2 transit subsidy.
CM Sukhu stated that tea estates would be developed as eco-tourism destinations and that the focus is on increasing religious tourism and investigating lesser-known tourist destinations. He stated that 70% of the loans taken over the last two years were used to repay the loans taken by the previous government and its interest component, bringing the state’s debt exposure to ₹1,04,729 crore, of which ₹29,046 lakh have been taken out by the current government. The amount spent on development activities was a mere ₹8,093.
“The financial year 2025-26 is full of financial challenges due to reduction in revenue deficit grant and stopping GST compensation,” stated Himachal Pradesh Chief Minister Sukhwinder Sukhu in his budget speech. “Repayment of the loan and interest from the previous government accounted for almost 70% of the state government’s loan,” he claimed.
According to Sukhu, the goal is to enroll one lakh farmers in natural farming by 2025–2026. Approximately 1.58 lakh farmers have switched to natural farming thus far. He added that the state government intends to establish a Spice Park in Hamirpur and that farmers who cultivate kachi haldi (raw turmeric) organically will receive a minimum support price of ₹90 per kg. He also announced a ₹20 rise in the daily salaries of workers covered by the Mahatma Gandhi National Rural Employment Guarantee Act, from ₹300 to ₹320. He approved the creation of a Special Task Force (STF) to address drug misuse in Himachal Pradesh.
The assured that the Shimla Ropeway project would begin in the upcoming financial year and roughly 500 electric buses will be acquired in 2025–2026. Furthermore, he noted that distinct directorates for schools and universities would be established and promised a number of programs for women, children, Divyangs and farmers.
Freebies policies of Congress govt cripples economy
Himachal Pradesh’s economy is in ruins as a result of the Congress government’s freebies strategy to win elections. The government faced ire last month when it demanded temple funds for Mukhyamantri Sukh-Aashray Yojana and Mukhyamantri Sukh Shiksha Yojna. The state, which is struggling financially, previously decided to lease the century-old Hotel Wildflower Hall and authorized the appointment of a consulting firm to help with the leasing process in a cabinet meeting.
As part of its borrowing cap of ₹6,300 crore, which was set to expire in December 2024, the state decided even to issue an extra Rs 500 crore loan in November 2024 to satisfy its developmental demands. 381,000 people were impacted when the Himachal Pradesh government’s acute financial situation prevented it from paying its employees and retirees in August of last year. In September 2024, the Himachal Pradesh Vidhan Sabha adopted an amendment bill that would have imposed an environment tax on energy use that ranged from 2 paise to ₹6 per unit and a milk tax of 10 paise per unit.
The administration’s decision to eliminate 125 units of free power, raise the price of diesel by ₹7 per litre, and renege on its election pledge to provide customers with 300 units of free power was already a burden for the common person. The price of tap water in rural regions was increased from ₹10 to ₹100 by the government.
In 2023, OpIndia reported that the government would face severe difficulties if the Old Pension Scheme, a major component of the Congress party’s election promise, were to be reintroduced. OPS was phased out and replaced by the National Pension Scheme (NPS) on 1st April 2024.
The debt to gross state product ratio for Himachal Pradesh was estimated to have been 43% in the previous fiscal year. At 53%, it was already on pace with a state like Punjab, which had reverted to the earlier pension plan. It had already exceeded the prudential threshold of 3% with a budget deficit of nearly 5%. However, the Congress party’s trivial attempt to take the state away from the saffron party only made its financial problems worse.
