Chief Minister Virbhadra Singh, who inaugurated the festival, led a procession of over 200 local deities to Paddal ground, the venue of the festival.
Addressing a gathering, he said the Mandi district was known as "mini Kashi" due to 81 Shiv temples located in the town.
Singh said classes had begun in the new IIT campus at Kamandh in Mandi.
A new medical college would also become functional by the end of current year in the district, he said.
Earlier, the Chief Minister inaugurated a Forensic Science Laboratory near Mandi.