In A Historic First, CM Sukhu Reduces Budget, Takes 50% Pay Cut, Trims Ministers’ Salaries By 20–30%

Severely hit by the fiscal crisis and the centre stopping the Revenue Deficit Grant (RDG), Himachal Pradesh Chief Minister Sukhwinder Singh Sukhu slashed the state’s budget for 2026-27, halved his own salary, and trimmed the pay of cabinet ministers and senior IAS, IPS, and IFS officers. 

This is the first time that such salary cuts have been imposed on the state's affordable class, besides a significant reduction in the budget size of the state under any Chief Minister.

In a big austerity push, Sukhu, who is also the finance minister, said the state was passing through a serious financial situation, which is compounded by the centre withdrawing RDG, thus putting the state at a loss of Rs 8,500 cr annually.

“To overcome this challenge, he has decided to voluntarily  defer his own salary by 50 percent and impose a similar cut of 30 percent in the case of Deputy Chief Minister and cabinet ministers, 20 percent for MLAs and another 30 percent for Chief secretary, Additional CS, Principal Secretaries, DGPs, and DGPs and Principal Chief Conservator of Forests (PCCF), and 20 percent in case of other categories of senior officers” he said

He, however, clarified that this decision was only for six months and was only a temporary measure. “As soon as the financial condition of the state improves, this money will be returned," he said.

Along with this, the chairmen and vice chairs of boards and corporations will also be losing 20 percent of their salaries as part of “fiscal discipline."

Not only this, but the Chief Minister suggested that the state High Court may also take a voluntary call, at its discretion, for a 30 percent deferment at the senior levels for strengthening the spirit of solidarity and responsibility towards the state.

He also hoped that the High Court would, with its guidance and concurrence, consider the temporary deferment of 20 per cent of the salaries of the district and additional district judges.

The Chief Minister announced that Group C and Group D employees have been excluded from the decision and will continue to get full salaries, while Group A and Group B employees will face a three percent cut for six months.

Earlier, the Chief Minister presented a trimmed Rs 54,928 crore budget for the state, proposing no new tax but initiating major reforms in governance, which he termed as the spirit of “Vyavastha Parivartan” .

The budget is down from Rs 58,514 cr from the current financial year—a cut of Rs 3,586, which is the first time in the state’s history, and the reasons for this are Sukhu attributed the discontinuation of the RDG , an annual loss of over Rs 8,500 crore.

He even claimed that the state was on the verge of a debt trap and finding it difficult to mobilise Rs 1300 cr every year, which has to be paid as interest liabilities on the borrowings.

Sukhu explained that out of every Rs 100 spent, Rs 27 would go towards salaries, Rs 21 for pensions, Rs 13 for interest payments, Rs 9 for debt repayment, and Rs 10 as grants to statutory bodies, leaving only Rs 20 for capital works and other activities.

The budget presentation, however, was marked by massive angry protests by the opposition BJP over the use of certain critical remarks in the budget speech by the Chief Minister when he was referring to the discontinuation of the RDG and the apathy of the BJP to help the government.

Leader of the opposition Jairam Thakur, who led the protest, also questioned how some objectionable words can be used in the solemn budget speech.

Unusual sloganeering during the Chief Minister’s budget speech led to the adjournment of the House. Order returned after a 20-minute stalemate, with Speaker Kuldeep Singh Pathania agreeing to remove critical remarks from the speech and proceedings.

Presenting the budget, the Chief Minister announced 300 free units of power for one lakh “poorest and poor” families, who have not been covered in the BPL list, yet their social and economic conditions are comparable to those below the poverty line. The government has done a special survey of these families.

He announced the launch of Mukhya Mantri Apna Sukhi Parivar to grant Rs 1500 pm to women belonging to these one lakh families, build pucca houses for them in a phased manner, and help in their economic upliftment.

Referring to the economic survey report, the Chief Minister said the state’s economy has steadily strengthened during the past three years, and this was mainly a result of focus on the rural economy and schemes he had started to boost families' income through a hike in the milk prices and MSP for maize, wheat, barley, turmeric, and ginger.

The per capita income of the state during 2025-26 has grown by 9.8 percent and has reached Rs 2.83,626 cr, which is a jump of Rs 64,051 crore, higher than the per capita income of the country. This shows the fundamentals of the state economy were very strong, and measures underway are aimed at making the state self-reliant and a model of sustainable green development.

Expressing concern over the centre starving the state of funds, the chief minister said a comparison of Himachal Pradesh with Uttarakhand and Assam is wrong, as Himachal is a hill state with limited resources like water and forest.

“Himachal is the lung of North India and should get a green bonus, but instead the revenue deficit grant to the state has been discontinued.” Said Sukhu as he also drew attention towards the Middle East war, which has started impacting the state as well, and LPG prices are increasing due to the global crisis

The Chief Minister also announced plans to develop an aerocity in Kangra and a provision of Rs 3,300 crore to acquire land to build an airport in the district.

The state also hiked the milk procurement price by Rs 10 per litre, with cow milk to be bought for Rs 61 per litre and buffalo milk at Rs 71.

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