Governor Shiv Pratap Shukla has given formal assent to three bills increasing salaries and allowances for Himachal Pradesh’s political leadership, marking the first salary increase since May 2016. While the government justifies the measure as necessary compensation, critics are questioning the move’s timing and fiscal prudence, given the state’s deteriorating financial position.
The numbers tell a story
The Vidhan Sabha passed three bills proposing a 24 per cent increase in salaries and allowances, with the hike linked to the price index, ensuring an automatic increase every five years. The revised pay structure will impose an additional financial burden of approximately Rs 24 crore annually on the state exchequer.
The Chief Minister’s salary will now rise from Rs 95,000 to Rs 1.15 lakh per month, Speaker’s from Rs 80,000 to Rs 95,000, Deputy Speaker’s from Rs 75,000 to Rs 92,000, Cabinet ministers’ from Rs 80,000 to Rs 95,000, state ministers from Rs 78,000 to 93,000, Deputy Ministers from Rs 75,000 to Rs 80,000 and MLAs from Rs 55,000 to Rs 70,000. The salary of former MLAs has been enhanced from Rs 36,000 to Rs 50,000 per month. The sumptuary allowances for all these categories have also been hiked.
The fiscal context
The salary increase arrives at a precarious moment for the state. Himachal’s cumulative debt burden has reached Rs 103,563 crore and it has become the third most debt-stressed state. More strikingly, of every Rs 100 the government spends, Rs 25 goes on salaries, Rs 20 on pension, Rs 12 on interest payment, and Rs 10 on debt payment, leaving only Rs 24 for development.
The state struggles every month to pay salaries to its 2.25 lakh regular employees and pensions to retired employees. As recently as September 2024, nearly 2 lakh employees and 1.5 lakh pensioners did not receive their salaries and pensions on 1 September 2024 due to the state’s financial constraints.
The announcement comes at a time when Himachal Pradesh is struggling under a debt burden nearing Rs 1 lakh crore, yet the government has proceeded with boosting pay for elected officials.
Growing unemployment crisis ignored
While legislators received their pay hike, Himachal Pradesh reels under an alarming unemployment rate of 29.6% for youth aged 15-29, which is among the highest in the country and double the national average of 14.6%. For the over 8.46 lakh registered unemployed educated youth, there are no fresh job creation schemes or recruitments on the horizon.
The contrast has drawn sharp criticism. For the jobless youth of Himachal, this Diwali brings little hope and no opportunities, with the stark contrast between the state’s decision to hike lawmakers’ pay and the silence on employment generation described as “highly condemnable”.
History of increasing burdens
The salaries and allowances of the Chief Minister, ministers, Speaker, Deputy Speaker and MLAs were hiked last time in May 2016. Later, the previous BJP government had also introduced an amendment bill to hike their salaries and allowances, but it was dropped after opposition from some quarters due to the Covid pandemic.
The timing of the current increase echoes concerns about political priorities. The announcement comes at a time when the Himachal Pradesh government has implemented a salary hike for elected officials just days before Diwali, alongside announcements of bonuses for employees and relief for contract workers—creating what observers describe as festive-season appeasement.
Government justification vs. Opposition questions
The government argues the increase reflects the economic circumstances of elected officials and brings them on par with other sections receiving cost-of-living adjustments. Both ruling Congress and opposition BJP members supported the bills in the assembly.
However, the move has intensified scrutiny of government spending priorities. With the state’s Revenue Deficit Grant set to reduce to Rs 3,257 crore in 2025-26 from Rs 6,258 crore the previous year, the fiscal space for such increases has visibly narrowed.
