Himachal Pradesh is witnessing a rapid transformation in its urban landscape as the State Government intensifies efforts to bolster urban governance and infrastructure in line with growing urbanization. In a landmark decision in December 2024, the government expanded and upgraded several Urban Local Bodies (ULBs), reflecting its commitment to inclusive and sustainable development.
The number of ULBs has grown from 60 to 74, including 29 Municipal Councils and 37 Nagar Panchayats. Notably, 14 new Nagar Panchayats were constituted, three Nagar Panchayats upgraded to Municipal Councils, and three Municipal Councils—Hamirpur, Una, and Baddi—were elevated to Municipal Corporations. This expansion brings the total Municipal Corporations in the state to eight, joining Shimla, Dharamshala, Solan, Palampur, and Mandi.
To support these newly formed and upgraded urban entities, a development grant of Rs. 10.75 crore has been allocated for 2025-26. The funds are earmarked for vital infrastructure improvements, including roads, street lighting, sanitation, parks, and parking. Hamirpur, Una, and Baddi Municipal Corporations will each receive Rs. 1 crore, while Municipal Councils like Nadaun, Baijnath-Paprola, and Sunni will get Rs. 25 lakh each. Each new Nagar Panchayat is allotted Rs. 50 lakh. To ease the urban transition, affected residents enjoy a three-year property tax exemption and continued water tariff benefits.
The government’s focus on small urban entrepreneurs is evident in the expansion of the Mukhya Mantri Laghu Dukandar Kalyan Yojana. This scheme offers distressed small traders—such as vendors, tea stall owners, and barbers—a one-time settlement of up to Rs. 1 lakh in bank loans, with the state bearing the interest, promoting business growth and livelihood enhancement.
Digital governance is a key pillar of the development strategy, highlighted by the launch of the One State One Portal Citizen Seva under the National Urban Digital Mission. This online platform aims to deliver seamless, transparent municipal services across ULBs, with nine services already active and 45 more in the pipeline.
Further strengthening urban governance, the state has increased monthly honorariums for elected representatives of ULBs, acknowledging their role in fostering local democracy.
Looking ahead, the government plans to establish Municipal Common Services Centers at district levels to improve urban planning, sanitation, solid waste management, and financial sustainability of ULBs. A Rs. 49.98 crore proposal has been submitted to the Centre for this initiative. Additionally, proposals under the Urban Challenge Fund seek support for innovative urban redevelopment, water and sanitation projects, and financing models like municipal bonds and public-private partnerships.
The Urban Development Department is also successfully implementing major Centrally Sponsored Schemes such as 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 initiatives, funded on a 90:10 Centre-State basis, are instrumental in improving urban infrastructure, housing, sanitation, and livelihoods across Himachal.
With a focus on people-centric planning, technology adoption, and financial empowerment, Himachal Pradesh is crafting a modern urban narrative—building vibrant, resilient towns and cities that are ready for the future and contributing to a self-reliant urban ecosystem.
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