Himachal Govt’s big push for urban development
Accelerates growth in 74 ULB’s
Himachal Pradesh is undergoing a remarkable transformation in urban development matching the State’s increasing pace of urbanization. The Government has taken decisive steps to strengthen urban governance and improve civic infrastructure across semi-urban and emerging urban areas. In a significant move made in December 2024, the Government constituted 14 new Nagar Panchayats, upgraded three Nagar Panchayats to Municipal Councils, and elevated three Municipal Councils which includes Hamirpur, Una and Baddi to Municipal Corporations, thus increasing the strength of Corporations to eight with already existing viz: Shimla, Dharamshala, Solan, Palampur, Mandi.
Thus the number of Urban Local Bodies (ULBs) has increased from 60 to 74 which include 29 Municipal Councils and 37 Nagar Panchayats. This expansion is a testament to the Government’s commitment to ensuring inclusive, well-planned and sustainable development.
To support infrastructure in these newly formed and upgraded urban bodies, a development grant of Rs. 10.75 crore has been proposed for the current financial year 2025-26. The grant will be utilized to improve roads, street lighting, sewerage, sanitation, parks and parking facilities. Municipal Corporations such as Hamirpur, Una and Baddi will receive one crore rupees each. Apart from this Nadaun, Baijnath-Paprola and Sunni Municipal Councils get Rs. 25 lakh each and the 14 new Nagar Panchayats will be given Rs. 50 lakh each. To ease the transition of rural areas into the urban fold, the government has also provided a three-year exemption from property tax and continued existing water tariffs for the affected residents.
Recognizing the vital role of small urban entrepreneurs in the State’s economy, the government under the leadership of Chief Minister Thakur Sukhvinder Singh Sukhu is set to roll out an expanded version of the “Mukhya Mantri Laghu Dukandar Kalyan Yojana.” This welfare scheme will provide a one-time settlement of up to one lakh rupees through banks for distressed vendors and shopkeepers with an annual turnover below Rs. 10 lakh. The interest on such loans will be borne by the state government which would help the fruit and vegetable vendors, tea stall owners, cobblers, barbers and other small traders to expand their businesses and improve their livelihoods. This initiative not only uplifts the financial condition of small entrepreneurs but also strengthens the economic fabric of urban Himachal.
A key initiative of the state government’s development strategy for urban areas is the digital transformation of governance through the “One State One Portal Citizen Seva,” launched under the National Urban Digital Mission. This platform, developed in partnership with the Ministry of Housing and Urban Affairs and the National Institute of Urban Affairs, is based on the UPYOG (Urban Platform for Delivery of Online Governance) framework. It aims to provide seamless and transparent online services to citizens across all ULBs. As of now, nine municipal services have been rolled out and a total of 45 services are being boarded in phases, ensuring improved accessibility and efficiency.
In an effort to strengthen urban governance further, the state government has also proposed an increase in honorarium for elected representatives of ULBs. The enhanced monthly honorarium for Mayors, Deputy Mayors, Councilors, Presidents, Vice Presidents and Members of Municipal Councils and Nagar Panchayats reflects the government’s recognition of their service and role in strengthening local democracy.
Looking ahead, the government is planning to set up Municipal Common Services Centers at the district level, designed to offer advanced urban planning solutions, improve sanitation, manage solid waste, and strengthen the financial sustainability of ULBs. A comprehensive proposal worth Rs. 49.98 crore has been submitted to the Government of India for this initiative. Additionally, proposals have been sent to the Centre under the Urban Challenge Fund, which will support creative city re-development projects, water and sanitation improvements and development through innovative financing models like municipal bonds, bank loans, and public-private partnerships.
The Urban Development Department is also efficiently implementing all major Centrally Sponsored Schemes, including Swachh Bharat Mission (Urban) 2.0, AMRUT 2.0, Pradhan Mantri Awas Yojana (Urban), the National Urban Livelihood Mission, and the Smart City Mission. These schemes, implemented on a 90:10 Centre-State funding basis, are playing a transformative role in enhancing urban infrastructure, sanitation, housing and livelihoods across the State.
Himachal Pradesh is steadily shaping a new urban narrative that is people-centric, technology-driven and inclusive. Through thoughtful planning, financial support and digital innovation, the state government is laying a robust foundation for vibrant, resilient and future-ready towns and cities paving the way for a truly modern and self-reliant urban Himachal.
