Shimla, Dec 7— Himachal Pradesh’s tax revenue is projected to drop by ₹1,726.55 crore in 2025–26 due to lower receipts from state GST, land revenue and state excise, according to government data tabled in the legislative assembly on Friday. The information, placed before the House by chief minister Sukhvinder Singh Sukhu under Form-5 of the Himachal Pradesh Fiscal Responsibility and Budget Management Rules, shows the state’s latest tax estimates falling far below the budgeted target.
The data attributes the biggest hit to changes approved by the 56th GST Council meeting, after which the Union government restructured rates from September 9 by abolishing the 12% and 28% slabs and introducing a 40% slab for sin goods. “Due to this rationalisation, receipts on account of state goods and services tax are expected to decrease during the year 2025–26 as well as in subsequent financial years,” the statement said.
A further shortfall of ₹1,000 crore is expected because of procedural delays in the special assessment of land revenue under the Himachal Pradesh Land Revenue (Amendment) Act, 2025. While tax revenue was pegged at ₹16,101.10 crore in the budget, the latest estimate stands at ₹14,373.55 crore. Non-tax revenue, however, is expected to remain at budgeted levels.
The state will see some relief through higher central grants. Centrally sponsored scheme allocations are projected to rise by ₹1,662.73 crore due to increased receipts under the National Disaster Response Fund, Pradhan Mantri Awas Yojana, MGNREGA, compensation for Renuka Ji dam oustees, rural road and irrigation programmes, the National Ayush Mission and upgrades to medical and nursing colleges.
Correspondingly, expenditure on these schemes is expected to rise by ₹1,299.19 crore. The state’s fiscal deficit is now projected at ₹12,114 crore — higher than the budget estimate of ₹10,337.97 crore — pushing the deficit to 4.74% of GSDP.
Sukhu told the House that Himachal Pradesh, as a hill state with special-category status, remains heavily dependent on revenue-deficit grants. He said the 15th Finance Commission recommended ₹3,000 crore less in such grants for 2025–26 compared to the current year. “Increasing natural disasters have also affected the state’s revenue,” he said.
To address the shortfall, the government has outlined several corrective measures. The medium-term fiscal strategy focuses on expanding financial resources and curbing avoidable expenditure. The statement said the government will cut unproductive spending, implement Phase-II of the Himachal Pradesh Sadbhawana Legacy Cases Resolution Scheme to boost revenue, and continue rationalising state institutions. New cesses have also been introduced for specific schemes as part of efforts to stabilise finances.
