Sharma died of a liver ailment at a private hospital in Gurgaon yesterday, just three months after getting elected unopposed to the Upper House.
Her body was kept for two hours at the Congress's state headquarters here where people had a last glimpse of the Congress leader.
Her funeral pyre was lit by her son.
Chief Minister Harish Rawat and PCC chief Kishore Updhyay also took part in the funeral procession upto Lakhibagh cremation ground.
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"She did her precious bit to rebuild the party in the state along with us at a time when it had been pushed to the margins. It is a personal loss to me," he told reporters.
Sharma, a former mayor of Dehradun, is survived by her husband and three sons.
A three-day state mourning has been declared following her death.
She was elected unopposed to the Rajya Sabha in November last year as a Congress member thus becoming the first woman member of the Upper House from the hill state, Rawat's media in-charge Surendra Kumar said here yesterday.