EXCLUSIVE: 'GST Hurt Producer States Like HP, But We're Building a Self-Reliant Himachal': CM Sukhvinder Singh Sukhu The Chief Minister said the state's core growth pillars—tourism, hydroelectric power, dairy, food processing, horticulture, and natural farming—are being reimagined.

Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu is on a mission to make the hill state economically self-reliant within the next two years. In an exclusive conversation with Entrepreneur India, Sukhu laid out his roadmap for transforming Himachal into a sustainable, entrepreneur-driven, and climate-conscious economy, while addressing structural challenges like the uneven impact of the Goods and Services Tax (GST) on producer states.

"Our goal is simple to make Himachal Pradesh a self-reliant state within the next two years," Sukhu said. "Every policy and initiative is being aligned with the state's natural strengths and unique geography."

The Chief Minister said the state's core growth pillars tourism, hydroelectric power, dairy, food processing, horticulture, and natural farming are being reimagined not just as traditional sectors but as engines of green and inclusive growth. "These sectors are aligned with sustainability, climate adaptation, and rural livelihood generation," he added.

Harnessing Natural Strengths for Modern Growth

The government's focus on infrastructure modernisation airport expansion, improved connectivity, and heliport construction is meant to unlock regional economies. The Dharamshala–Kangra airport expansion is already underway, with similar projects in the pipeline.

Himachal's diverse terrain, spread across the Shivalik, mid-Himalayan, and greater Himalayan ranges, offers distinct microclimates ideal for natural farming. "We are promoting natural and organic farming aggressively, turning it into a profitable and environmentally responsible economic model," Sukhu said.

With 13,000 MW of hydropower already tapped, Himachal is positioning itself as a green energy hub. "If there is any state in India capable of leading the green hydrogen revolution, it is Himachal Pradesh," Sukhu said confidently.

Tourism 2.0: From Seasonal to Sustainable

Tourism, which contributes nearly 8% to Himachal's GDP, is being transformed through the Chief Minister Tourism Startup Scheme, designed to simplify clearances and encourage local entrepreneurship.

"Tourism is not just a revenue source for us it is part of Himachal's identity. But we want to move from a seasonal, service-based industry to a sustainable, entrepreneur-led ecosystem," Sukhu said.

Under the new scheme, all proposals for five- to seven-star hotels will be processed through a single-window clearance system to eliminate bureaucratic delays. The government is also providing interest subsidies on loans 3% in urban areas, 4% in rural areas, and 5% in tribal areas for tourism ventures by Himachali entrepreneurs. The plan includes provisions for 200 new five-star hotels, with investors allowed to choose project locations freely.

Additionally, the government is promoting solar power installations in hotels and resorts, offering interest subventions to encourage green energy adoption in tourism infrastructure.

GST: A Structural Disadvantage for Producer States

Sukhu was candid about the impact of GST reforms on the state's finances. "Producer states like Himachal are at a structural disadvantage under the GST regime," he said.

Before GST, the state earned around ₹4,000 crore annually through excise and VAT. "Post-GST, that figure has dropped to ₹150 crore," Sukhu said. "Himachal is Asia's largest pharmaceutical manufacturing hub. We produce medicines like paracetamol, but since these are consumed elsewhere, the GST revenue goes to consumer states, not to producers like us."

He added that smaller states often find it difficult to make their case in GST Council meetings. "We've raised this issue repeatedly. The recent rationalisation of tax slabs has further eroded our revenue base," Sukhu noted.

Green and Clean Tourism Vision

Himachal's tourism vision is deeply tied to sustainability. Under the Rajiv Gandhi Self-Employment Startup Scheme, unemployed youth receive 50% subsidy on electric vehicles (EVs), contributing just 10% of the cost. So far, over 100 EVs have been deployed across departments, while the Himachal Road Transport Corporation is inducting 300 electric buses into its fleet.

"Our idea is to make Himachal a clean-mobility tourism state where visitors experience nature without polluting it," Sukhu explained.

The state is also converting existing diesel taxis into EVs, promoting low-emission travel in ecologically fragile zones.

Read The Full Interview In November Edition of Entrepreneur Magazine