Himachal imposes 30% Top-Level Pay Cuts Amid Fiscal Crisis, Rattles IAS Lobby 

In the fund-starved state, the Himachal Pradesh government has imposed a 30 per cent pay cut on the salaries of top bureaucrats, senior IPS officers, and other All India and state services officers to tide over financial difficulties.

However, there is growing unease among bureaucrats and senior government officials, many of whom are questioning why they are being asked to bear the burden of what they see as a collective failure of the political leadership to manage the state’s affairs effectively.

Nevertheless, this first-ever move — not yet tested or tried by any state government facing an alarming debt burden and fiscal stress — may trigger a countrywide debate on the governance model, especially where governments change every five years.

From this month onwards, those in the ranks of secretaries, heads of departments, Inspector General of Police, Deputy Inspector General of Police, Superintendent of Police, police officers up to the level of SPs, Chief Conservator of Forests, Conservator of Forests, and other forest officers up to the District Forest Officer level will face a reduction in pay of up to 20 per cent.

The move imposes effective salary cuts of 20 to 50 per cent on bureaucrats, IPS and IFS officers, Cabinet ministers, and the Chief Minister, as announced in the 2026–27 Budget by Chief Minister Sukhwinder Singh Sukhu.

He said the state was facing severe financial strain after the Centre stopped Revenue Deficit Grants (RDG) worth Rs 10,000 crore and GST compensation of Rs 13,000 crore.

“Some tough decisions need to be made, and I expect everyone to support the government’s efforts to pull the state out of the crisis and make it self-reliant by 2027,” said Sukhu.

He has already announced a voluntary 50 per cent cut in his own salary, 30 per cent for the Deputy Chief Minister and Council of Ministers, and 20 per cent for MLAs.

Sukhu describes it as a temporary measure for six months

In addition, 20 per cent of the salaries of all chairmen, vice-chairmen, deputy chairmen and advisers (political appointees) will be deducted during the same period.

Among senior administrative, police and forest officers, similar cuts have been introduced. Salaries of the Chief Secretary, Additional Chief Secretaries and all Principal Secretaries will be reduced by 30 per cent, while Secretaries and Heads of Departments (HoDs) will face a 20 per cent cut.

Likewise, the DGP and ADGPs will take a 30 per cent cut, while IGPs, DIGs, SSPs and officers up to SP rank will see a 20 per cent reduction. In the forest department, the HoFF, all PCCFs and Additional PCCFs will face a 30 per cent cut, while CCFs, CFs and officers up to DFO level will take a 20 per cent cut.

The state’s finance department has issued a notification

“The payable and deferred components of salary will be shown in the e-salary system and payslips to ensure transparency. The deferred portion will count for pension benefits, leave encashment and other purposes under relevant rules,” it says.

Statutory deductions, including income tax and contributions to pension schemes and provident funds, will continue to be calculated on the full salary amount to avoid future accounting issues.

A senior official said the deferred amount would be calculated on net salary after deductions for tax, the National Pension System (NPS), Unified Pension Scheme (UPS), General Provident Fund (GPF) and other fixed deductions. Employees repaying loans may submit an undertaking to the Drawing and Disbursing Officer (DDO), after which the deferment will be calculated after loan instalments are deducted.

The order also said boards, corporations, PSUs, autonomous bodies, universities and other grant-aided institutions receiving state budgetary support should adopt the same measure.

No exact estimate of savings has been given, though the government described it as a “collective austerity measure”, with deferred amounts to be paid later.

“It is a move to send a message to the public that a salary cut has been imposed from the top while low-paid employees and also the people have been spared from the financial burdens or withdrawal of the benefits," says CM’s Principal Media Advisor Naresh Chauhan.

Former Chief Minister Jairam Thakur says the cuts would not help the state and instead signalled a looming financial emergency, with no funds for development and fresh loans being used to meet payments and interest liabilities on debt exceeding Rs 1 lakh crore.

“The decision (to defer salaries) was taken for all the senior government employees and MLAs. But it is a step towards a financial emergency. There is a section of affected people who are thinking over if the state government is authorised to issue such orders or not. For this section, a legal review of this decision is necessary," he say