Chief Minister, cabinet,meet Rahul Gandhi, Kharge to brief them on state’s fiscal crisis
Vehicles registered in Himachal Pradesh, however, are exempted from paying the entry fee
BJP, business community see hike in toll fee as a blow to tourism industry, hill economy
‘Atithi Devo Bhava’-- a Sanskrit phrase that means “The guest is equivalent to God." The phrase reflects the traditional Indian value of treating guests with great respect, warmth, and hospitality.
But cash-strapped Himachal Pradesh, severely impacted by the Centre’s move to scrap Revenue Deficit Grant (RDG)---an annual Rs 6000 cr jolt, the tourist state has made arrivals at all its entry points costlier for all kinds of visitors and tourists as a step to mobilise additional resources.
The move, which comes just ahead of the upcoming tourist season, has not gone well within the state and its resourceful neighbours in Punjab, Haryana, and Delhi, apart from the business community and daily commuters vehemently seeking withdrawal of the steep hike in the proposed toll fee, applicable from April 1.
While the Punjab government already made its intentions clear to approach Union Minister for Highways and Transport Nitin Gadkari to seek withdrawal of hike, residents of Punjab and Himachal Pradesh, living next to the state borders, have held public protests at Mehatpur, an entry toll barrier in Una district.
The Himachal Pradesh government, in a notification issued two days back, has ordered a steep increase in the entry tax for ‘out-of-state’ private vehicles from Rs 70 to 170.
“Private vehicles entering Himachal from neighbouring states such as Punjab, Haryana, Uttar Pradesh, and Delhi will have to pay Rs 170 as entry toll tax, up from the earlier Rs 70. Vehicles carrying 12+1 passengers will now be charged Rs 170, up from the previous Rs 110,” reads the order.
This is the category that hits a majority of the commuters, including traders, lawyers, private sector employees, and families, who cross the border frequently for work, education, healthcare, and social obligations, along with tourists.
Heavy vehicles, including those carrying goods and supplies, will see their toll revised from Rs 720 to Rs 900. Construction machinery, including JCBs and similar equipment, will now be charged Rs 800, compared to the previous Rs 570. The entry fee for tractors has been increased from Rs 70 to Rs 100.
The vehicles registered in Himachal Pradesh, however, are exempted from paying the entry fee. But non-HP registered tourist vehicles—private cars, Travellers, taxis, jeeps, vans, mini-buses, motorbikes, etc., coming via road from neighbouring states, interstate goods transport, and commercial passenger vehicles will have to pay more from April 1, 2026.
The opposition BJP has also criticised the Congress government's decision, which, it says, will hit the state’s tourism industry, a major earner of revenue, besides the business category and common citizens. Senior Party MLA and former BJP state president Satpal Satti also joined the protest.
Opposing the entry fee hike, Punjab state BJP vice-president Subhash Sharma reminds that borders between the two states should not become walls between people, who had lived like a family for generations.
“Punjab and Himachal may have separated on paper in 1966 to form a new state, but no line on a map can sever the deep social and economic ties. Even today, lawyers from Ropar stand in courts in Una, patients from Himachal seek treatment in Punjab’s hospitals, and students cross the border every single day in pursuit of education and opportunity,” he reminds, adding, “And now, they are expected to shoulder this unreasonable tax.
Senior BJP MLA from Una, Satpal Satti, concurs with Sharma, “This is not a BJP or Congress issue; it is a people’s issue. Himachal Pradesh was granted full statehood in 1971, but even after that, border areas have functioned as shared spaces. It will also be a blow to tourism, hitting the backbone of the hill economy.”
The protesters on Saturday warned that if the entry fee hike isn’t withdrawn, the agitation will create serious hardships for the state, already struggling with multiple fiscal challenges.
Chief Minister’s principal media advisor Naresh Chauhan said the state is facing a high debt burden of over Rs one lakh crore and a fiscal crisis as a result of the centre’s abrupt move to discontinue the Revenue Deficit Grant (RDG). The government has been compelled to explore new ways to raise its resources.
The recommendation of the 16th Finance Commission has left the state with a shortfall of Rs 6000 cr and also tied the government's hands from raising loans beyond the Rs 10,000 cr limit. The only viable options left for a small state are to tap additional means for raising internal revenue and plug leakages in the collections.
The cabinet, in its meeting last week, has thus stepped up the drive on resource mobilisation through reforms in excise, liquor vends, toll collection, and revised entry fee structures for vehicles entering the state, he explains.
According to Chauhan, the Department of State Taxes and Excise has notified the Toll Policy 2026-27 for the financial year April 1 to March 31, 2027, under which toll barriers will be leased through a transparent e-auction mechanism with fixed reserve prices.
The policy mandates electronic toll collection, CCTV monitoring, and phased FASTag implementation to curb leakages and improve compliance while ensuring steady monthly remittances to the state exchequer. Alongside toll reforms, the government is strengthening excise collections, a key component of the state's own tax revenue.
In Delhi, Chief Minister Sukhwinder Singh Sukhu and his entire cabinet also held a meeting with senior Congress leader Rahul Gandhi and AICC president Mallikarjun Kharge and explained how the centre has cut down the revenue deficit grant, a key constitutional mechanism to help the resource-starved hill state.
Himachal Pradesh’s revenue collections from all sources is just Rs 42,000 cr, including the annual borrowing limit of Rs 10,000 cr, but the expenditure is Rs 48,000 cr. The resource gap, which used to be bridged by the centre by way of the Revenue Deficit Grant since 1951, has been stopped.
It has made the survival of a border state, where the cost of development and delivery of services to the people living in remote mountainous areas is very high, alleges Deputy Chief Minister Mukesh Agnihotri, who has rather put the annual loss to the state over Rs 10,000 cr if one takes into account recent monsoon disasters and ecological costs.
Over the past three years, the state government has generated an additional Rs 3,000 crore in revenue. He indicates that in the coming days, more stringent measures may be introduced to further augment the state’s income, enabling it to cover the rising cost of public services and finance new development initiatives.
