For the first time, the Uttarakhand State Budget (2025-2026) has crossed the Rs 1 lakh crore mark (10,1,175,33 cr), a significant milestone in the development journey of what used to be once just a peripheral part of Uttar Pradesh. The goal of establishing a separate state for the sake of bettering the lives of the hill people seems on the way to being fulfilled. Looking at the apparent philosophy behind the budget, it appears that the attempt is to bring about development in a sustainable way while encouraging the ‘animal spirits’ of entrepreneurship. While the doors have been opened in economic terms, there are numerous schemes focused on social welfare. Bridging the gap between rural and urban areas, the plains and the hills is by no means an easy task.
The major objectives that become evident in the budget are stemming migration from the hills, involving the non-resident Uttarakhandis in reviving the heritage of the hills, publicising and promoting the winter pilgrimage, creating an enabling environment for industrial activity, improving quality of education in the villages and the towns, increasing air connectivity and further developing the tourism sector.
There is also a strong focus on building infrastructure as an enabler for economic growth and quality of life. This is in line with the general philosophy of the central government under PM Modi. Better road connectivity, riverfront development, promotion of tourism circuits, construction of bridges, safer roads in the hills, etc., are all part of the envisaged development model.
The state’s fiscal health seems good as most indicators are positive. As mentioned often enough times, the state’s per capita income is higher than the national average, from a dismal low before Uttarakhand’s formation. A significant portion of government funds (almost 24 percent) goes into payment of wages, pension, etc. At a time when unemployment is a major political issue, there is little chance of cutting down in this area in the short term, but efforts are required to increase the efficiency of government machinery, if development is to be fiscally sustainable.
Overall, there is also a tendency to over-centralise control, when in a lot of sectors, local governance needs to be further empowered. Elected representatives and officials in the field should be able to not just take decisions as autonomously as possible but also have the means to implement them. Otherwise, even a blip in internet connectivity would put the basic system in freefall.
