Budget 2025 is good for Uttarakhand—UDAN boosts tourism: Shaurya Doval

Finance minister Nirmala Sitharaman has presented her eighth Union Budget, which, as anticipated, maintains continuity with the previous Budgets of the Modi government. Over the years, budgetary recommendations have underscored the government’s commitment to reforms and long-term economic growth rather than short-term populism.

Some announcements in Budget 2025 pertained to states like Bihar and Assam. However, it would be baseless to claim that the Modi government engaged in favouritism, as alleged by a leader from Punjab immediately after the Budget speech outside Parliament. The comments, however, led me to analyse the budget through the lens of Uttarakhand.

Several announcements will impact Uttarakhand’s economy, and the significant relief in income tax slabs will directly benefit a considerable portion of the state’s population. The objective is to understand the key sectoral impacts and the opportunities the state can leverage for its growth and development.

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In 2023-24, Uttarakhand’s GDP contribution stood at 10 per cent for the primary sector, 47 per cent for the manufacturing sector, and 43 per cent for the service sector. The manufacturing sector, which registered a 9.2 per cent growth rate, primarily consists of MSMEs, concentrated in the plains.

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Meanwhile, the service sector is predominantly driven by tourism and hospitality, making infrastructure and connectivity critical factors for growth. Another pressing issue is rapid urbanisation due to migration, particularly intra-state migration, which has led to increased pressure on cities like Dehradun, Haldwani, and Haridwar. The Budget, addressing these challenges, presents a significant opportunity for Uttarakhand.

Connectivity & infrastructure

The Union government has allocated an outlay of Rs 1.5 lakh crore for 50-year interest-free loans to states, aimed at capital expenditure and incentives for reforms. Uttarakhand can utilise this opportunity to fund infrastructure projects related to connectivity, ropeways, and water supply. These investments will not only enhance connectivity but also boost tourism, particularly in areas with limited accessibility.

The modified UDAN scheme is set to improve air connectivity with 120 new targeted air-connected destinations, out of which Uttarakhand needs to push for maximum allocations so it can reap the benefits. The destinations stipulated in the scheme include small airstrips and helipads, which are crucial for a mountainous state like Uttarakhand.

Further, the government plans to identify the top 50 tourist destinations in the country for development in partnership with states through a challenge mode. This will serve as a great example of competitive federalism in India.

Under the scheme, states will need to provide land for building key infrastructure, and hotels in these destinations will be included under the Harmonized List of Infrastructure (HML) category. Classifying hotels as infrastructure will be of great help for tourism-related economic activity.

Uttarakhand is home to major religious sites like the Char Dham (Badrinath, Kedarnath, Gangotri, and Yamunotri) and Har ki Pauri (Haridwar) as well as renowned hill stations and natural attractions. The state should dedicate maximum efforts to include these destinations among the top 50 tourist destinations.

Additionally, the streamlined e-visa process will help attract a larger number of foreign tourists. A three-year pipeline for infrastructure development under the India Infrastructure Project Development Fund (IIPDF) scheme in public-private partnership (PPP) mode also presents an opportunity for Uttarakhand to enhance its infrastructure with strategic advocacy.

Another significant budgetary announcement is the ‘Urban Challenge Fund’ of Rs 1 lakh crore, aimed at rejuvenating cities to catalyse economic activity while enhancing their aesthetic appeal to attract tourists. An initial allocation of Rs 10,000 crore has been made for this year. Efficient utilisation of these funds could lead to a comprehensive urban transformation in Uttarakhand.

Also read: Budget 2025 corrects misguided tax regime of Nehruvian socialism. Changes India’s destiny

Manufacturing, startups, agriculture

Budget 2025 is highly promising for the state’s manufacturing sector. It not only simplifies regulations and compliance requirements but also improves the overall business environment. Notably, the credit limit for micro and small industries has been increased from Rs 5 crore to Rs 10 crore, facilitating an additional credit infusion of Rs 1.5 lakh crore over the next five years.

The central government’s intent to reform non-financial sector regulations, certifications, licenses, and permissions will further ease processes, making Uttarakhand an attractive investment destination under its ‘Destination Uttarakhand’ initiative. Additionally, linking local industries with the ‘Bharat Trade Net’ facility will help enhance exports on a global scale.

The Budget also provides encouragement for states aspiring to become startup hubs, fostering first-generation entrepreneurs who not only add value to the economy but also generate employment for Uttarakhand’s talented and hardworking youth. The ‘Global Capability Centers’ scheme, which promotes the establishment of offshore facilities of multinational corporations (MNCs) in tier-II cities, has the potential to drive economic and employment growth in Uttarakhand’s urban areas.

The allocation of Rs 91,000 crore through Alternate Investment Funds (AIFs) for startups, along with an additional Rs 10,000 crore through the Fund of Funds, will significantly bolster the state’s efforts to develop a thriving startup ecosystem.

Although the agriculture and allied sectors contribute only 10 per cent to the state’s GDP, nearly 69 per cent of Uttarakhand’s population resides in rural areas and is directly or indirectly engaged in agriculture. Enhanced credit for farmers through the Kisan Credit Card (KCC) scheme—with the limit raised from Rs 3 lakh to Rs 5 lakh—and the PM Dhan-Dhanya Krishi Yojana will help improve agricultural productivity. These efforts, coupled with programmes to promote fruit cultivation and the development of air cargo warehousing for high-value perishable produce, present significant opportunities for boosting Uttarakhand’s horticulture sector.

Overall, Budget 2025 presents several avenues for Uttarakhand to accelerate its economic development. By strategically leveraging these opportunities, the state can enhance its infrastructure, improve urban and rural economies, boost tourism, and support MSMEs, startups, and agriculture.

Efficient implementation and proactive policy interventions will be key to maximising these benefits for Uttarakhand’s long-term growth. With a clear vision and committed execution, the state has the potential to transform itself into a model of balanced regional development, setting an example for other states, including the 10 hill states in India.

Shaurya Doval is an Executive Committee Member of BJP Uttarakhand and a founding member of the India Foundation. Views are personal.

(Edited by Prasanna Bachchhav)

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