Himachal Pradesh defers salaries; CM, ministers, officials take pay cuts as debt tops Rs 1 lakh cr

Sukhu attributed part of the strain to the discontinuation of the Revenue Deficit Grant (RDG), which he said has resulted in an annual loss of Rs 8,000-10,000 crore.

• Himachal announces salary deferments for leaders and officials
• Rs 54,928 crore budget focuses on welfare and rural growth
• New welfare schemes include aid for women and free electricity

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The Himachal Pradesh government has announced sweeping salary deferments across political and administrative ranks for six months, citing a "serious financial situation", even as it unveiled a Rs 54,928 crore budget focused on welfare and rural growth.

Presenting the 2026-27 budget, Chief Minister Sukhvinder Singh Sukhu said 50% of his salary would be deferred, along with 30% for the deputy chief minister and cabinet ministers, and 20% for MLAs, chairpersons, vice-chairpersons, and political appointees.

The austerity measures extend deep into the bureaucracy.

Senior officials, including the chief secretary, DGP, additional chief secretaries, ADGPs, principal secretaries and senior forest officers, will see a 30% deferment. Meanwhile, secretaries, heads of departments, IGPs, DIGs, SSPs and SPs will face a 20% cut. Group A and B officers will have a 3% deferment, while Group C and D employees have been exempt.

Respecting judicial independence, the government has urged the high court to consider a voluntary deferment, including 20% for district and additional district judges, 3% for Group A and B judicial officers, and up to 30% for high court judges.

Defending the move, Sukhu stressed that it is not a permanent reduction. “We are not doing this for political benefit. These decisions are in the interest of Himachal Pradesh,” he said, clarifying that the step is a deferment rather than a salary cut.

The salary deferment comes against the backdrop of mounting fiscal pressure, with the state’s debt crossing Rs 1 lakh crore. The budget size itself has been reduced by over Rs 3,500 crore compared to the previous fiscal.

Sukhu attributed part of the strain to the discontinuation of the Revenue Deficit Grant (RDG), which he said has resulted in an annual loss of Rs 8,000-10,000 crore.

"This is not a political budget. It is a budget to strengthen the rural economy. We will have to face these circumstances," he said. The CM also flagged structural concerns over resource control. "Although Himachal Pradesh has resources, it does not have full rights over them, calling it a matter of concern," he noted.

Revenue receipts are estimated at Rs 40,361 crore, while expenditure is pegged at Rs 46,938 crore, leaving a revenue deficit of Rs 6,577 crore. The fiscal deficit is projected at Rs 9,698 crore.

Despite financial constraints, the government has rolled out key welfare measures, including Rs 1,500 per month assistance for women from one lakh families and 300 units of free electricity for poor households.

"The schemes we have brought will benefit the common people. We conducted surveys to identify Below Poverty Line families and reach people at the grassroots," Sukhu said.

The government has also raised procurement prices for milk, cow milk to Rs 61 per litre and buffalo milk to Rs 71, increased turmeric MSP to Rs 150 per kg, and brought ginger under MSP at Rs 30 per kg.

In a move to generate additional revenue, the state has proposed an “Orphan and Widow Cess” on petrol and high-speed diesel, capped at Rs 5 per litre.

“The state government has been providing financial aid and welfare support to orphans and widows from economically weaker sections. It has been considered necessary to levy a specific cess… to ensure a sustainable source of revenue for such welfare measures,” Sukhu said.

The state economy is projected to grow at 8.3%, with Gross State Domestic Product estimated at Rs 2.54 lakh crore and per capita income at Rs 2,83,626.

Spending patterns show that for every Rs 100 spent, Rs 27 will go towards salaries, Rs 21 towards pensions, Rs 13 towards interest payments, Rs 9 towards debt repayment, Rs 20 towards capital works and development, and Rs 10 towards grants.

Sectoral allocations include Rs 9,660 crore for education, Rs 2,868 crore for health, Rs 1,544 crore for women and child development and OBC welfare, Rs 542 crore for urban development, and Rs 250 crore for energy.

The Chief Minister also outlined long-term plans, including the development of three world-class cities, and emphasised improvements in water supply and healthcare. “We are focusing on providing pure drinking water in Shimla and across the state and introducing high-end technology in the health sector,” he said.

The opposition BJP has, meanwhile, sharply criticised the budget, with state president Rajiv Bindal calling it a “back gear budget.” “This is a ‘back gear budget’ that will take Himachal Pradesh backwards. Never before in the state's history has such a budget been presented with cuts running into thousands of crores,” Bindal said.

He alleged that the reduced outlay would hit development and accused the government of inflating figures through centrally sponsored schemes.

Targeting unfulfilled promises, he said, “The promise of providing one lakh government jobs in the first Cabinet has not been fulfilled. The guarantee of Rs 1,500 per month to 28 lakh women remains unimplemented even after 40 months. The milk procurement promise has also been diluted.”

Calling the document directionless, Bindal added, “This budget is merely a bundle of hollow figures with no clear direction for development or relief for the people.”

CM Sukhu has, however, urged unity in navigating the state’s economic challenges. “When it comes to the state's interests, everyone must come together,” he said.