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The Himachal Pradesh Assembly has approved the state budget for 2026-27, allowing expenditure of INR 58,830.30 crore from the consolidated fund. The budget outlines a revenue deficit of INR 6,577 crore and a fiscal deficit of INR 9,698 crore, staying within the prescribed limits at 3.49 per cent of GSDP. A significant portion of funds will go towards committed liabilities, leaving limited room for development spending. In response to financial pressure and reduced central support, the state leadership has announced temporary salary cuts across key positions.
The Himachal Pradesh Assembly has passed the budget for the financial year 2026-27 along with the Appropriation Bill, authorising the state government to spend INR 58,830.30 crore from its consolidated fund. Advertisement
The budget, presented in the past week by Chief Minister Sukhvinder Singh Sukhu, estimated a revenue deficit of INR 6,577 crore. The fiscal deficit was projected at INR 9,698 crore, which stands at 3.49 per cent of the Gross State Domestic Product (GSDP), remaining within the permissible fiscal limits.
The expenditure structure highlights the financial pressure on the state. Out of every INR 100, around INR 80 is expected to be allocated towards committed liabilities such as salaries, pensions, interest payments, and loan repayments. Only about INR 20 is likely to be available for developmental activities, indicating limited fiscal flexibility for new infrastructure and growth-oriented projects.
The state government has been dealing with a challenging financial position, further impacted by the discontinuation of revenue deficit grants as recommended by the 16th Finance Commission. These grants had earlier supported states with weaker revenue bases, and their withdrawal has added pressure on the state's finances.
To address the situation and signal fiscal responsibility, the chief minister has decided to defer 50 per cent of his salary for six months. It was also stated that the deputy chief minister and other ministers would take a 30 per cent salary cut, while MLAs would see a 20 per cent reduction during the same period.
The move comes as part of broader efforts to manage expenditure and maintain fiscal stability while continuing essential government functions.
Source PTI
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