Himachal Pradesh: A Double-Edged Strategy to Tackle Financial Crisis

In response to a financial crisis, Himachal Pradesh's government has increased bus fares and reclaimed hydropower projects from central PSUs. Aimed at reducing deficits and strengthening state revenue, these decisions highlight the urgency to improve financial health and control over local natural resources.

Facing a financial crisis, the Himachal Pradesh government, led by Sukhvinder Singh Sukhu, has taken decisive actions by increasing bus fares and reclaiming key hydropower projects from central public sector undertakings (PSUs).

The Cabinet approved doubling the minimum fare for bus travel from Rs 5 to Rs 10, attributing the rise to the mounting losses of the Himachal Road Transport Corporation (HRTC). The government justified the fare increase as vital for maintaining the public transport system, despite anticipating a strong public backlash.

In addition, the Cabinet sanctioned the takeover of four major hydroelectric power projects from the central PSU, Satluj Jal Vidyut Nigam Limited (SJVNL), including the Sunni Project (382 MW), Luhri Stage-I (210 MW), Dhaulasidh Project (66 MW), and Dugar Project (500 MW). Furthermore, the state will reclaim the 180 MW Baira Suil Hydro Project in Chamba from NHPC, as its 40-year agreement period has ended.

The actions are seen as an attempt to assert economic rights and bolster state revenue by improving resource management. Harshwardhan Chauhan, the Industries Minister, expressed confidence that residents would understand these tough decisions aimed at long-term sustainability, emphasizing the need to maintain both transport and hydropower rights in challenging times.

(With inputs from agencies.)