We tried to close door that caused corruption: Himachal Pradesh CM Sukhu

In a telephonic interview with Aditi Phadnis, Himachal Pradesh Chief Minister Sukhvinder Sukhu talks of rationalising power prices and subsidising the purchase of milk through sales of alcoholic products. He says the state’s finances are back on track. Edited excerpts. 

In two years, what have you gained? And what have you lost?

  I have neither gained nor lost: I have learnt. I learnt how to protect a legitimately elected government from political poaching. We wanted institutional change when we came to power. To achieve that we scrapped or changed nearly 100 laws that were old and outdated. We tried to close the door that caused corruption and leakage, because of which in one year we were able to earn additional revenue amounting to Rs 2,200 crore.

  How did you do this?

  For example, in the Bharatiya Janata Party’s (BJP’s) excise policy, tax on alcohol vends was just 10 per cent. It was a fixed sum of money, and a pittance. I said “let’s change this system to open auction”. So we shifted to competitive bidding for liquor vends. Whereas in the BJP’s four years, annual revenue from liquor vends used to be around Rs 150 crore (Rs 600 crore in four years) we found that by moving to an open-auction system we earned Rs 600 crore in just one year!  

The state earned Rs 1,815 crore in 2023-24, marking a 40 per cent jump over the previous year’s Rs 1,296 crore. We also introduced a Rs 10 cess on each bottle of liquor sold in the state. 

When I spoke to Business Standard before I became chief minister, I said my bigger plan was to cross-subsidise the purchase of milk through the sale of alcohol.  

The Himachal Pradesh government raised milk procurement prices from Rs 38 to Rs 45 and that of buffalo milk from Rs 38 to Rs 55 per litre this April. Milk producers are free to sell milk in the open market if they get a better price. Otherwise, the government will buy it. 

Then we made some drastic changes in the system of free power. Big hotels and companies used to get a power subsidy. We said: Those who pay income tax do not need power at subsidised rates.  

And we told low-income group families: We will give you free power so that your quality of life becomes a bit better.

When the election came, the outgoing BJP government distributed freebies amounting to Rs 5,000 crore — new institutions opened, power and water were made available free even to people who could and ought to pay for it, 50 per cent transport subsidy to women … 

We rationalised this. When the outgoing government could not return to power even after distributing “revri”, how could we achieve results by tweaks in administration and policy? Now Himachal Pradesh’s finances are back on track. When I became chief minister, Himachal Pradesh had a debt of Rs 75,000 crore.  

The Sixth Pay Commission award of arrears to state-government employees, amounting to Rs 10,000 crore, was pending. We paid that, despite the setback to our finances. 

In our tenure, we incurred a debt of Rs 28,000 crore. This included retiring a loan taken by the state in 1971 — we paid part of the principal and interest, which amounted to Rs 12,000 crore. We cleared a Rs 20,000 crore debt on a variety of borrowings.  

We have Rs 8,000 crore pending. We’ve ploughed that into development activities so that the state is once again known for fiscal prudence. We reverted to the Old Pension Scheme (OPS). And we are the country’s first state to give a  minimum support price for millet. 

These are only some of our achievements.

  What are your plans for the future?

  We want a green bonus for our state because we are the lungs of north India. Sixty-seven per cent of our land is forests. We already have provisions for punishing tree felling. The government of India wants decarbonisation and is battling climate-change pressures. It invests money in afforestation.  

But what about states like ours, which protect their green cover? Afforestation gets money but protection of trees gets no money. This is going to be a primary demand of Himachal Pradesh. 

We’re putting up a 1 Mw green hydrogen project with Oil India at Nalagarh. We’re pioneers.

  Our target is to become the most prosperous state of India by 2032.