Dhumal, who also holds the finance portfolio, has already hinted at bringing out a White Paper on the state’s finances shortly after the budget, but he proposes to strike a balance between growing deficit and funding of development projects. The budget deficit was nearly Rs 11,000 crore in 2003, but later took a sharp jump to Rs 18,000 crore in 2006-2007.

Sources said Dhumal is not inclined to burden people with new taxes. “Rationalisation of tax structure to raise the state’s income and mobilisation of additional resources will be high on the Chief Minister’s agenda,” said a senior official.

A major focus of the government, admits Dhumal, will be on putting the state on a fast track to development and creating new job opportunities in the tourism industry, hydro-power sector, horticulture and industry. The government also has plans to create a human resource of professionals who could be absorbed locally in sectors like hydro-power, industry, biotechnology and IT.

The planning commission last month had approved a plan size of Rs 2,400 crore for the state, which will form the basis for fixing priorities and sectoral allocations for the next year.

Yet the industrial sector, which has seen a major boost in the past five years after implementation of the Central package, is keeping a close eye on Dhumal’s budget. “There is an urgent need to boost the infrastructure sector, improve power availability through better distribution network and slash VAT rates on items of mass consumption,” says Dhian Chand, chairman of HP committee of the PHD Chamber of Commerce and Industry.

In a memorandum to the government, the chamber has asked for giving infrastructure status to the tourism industry and taking up public-private partnership projects in all the districts. There is a need for adopting a multi-dimensional and integrated strategy for tourism development in Himachal.

Putting forwarding some new proposals, Dhian Chand said, “Public-private partnership mode should be adopted for development of roads, promoting destination tourism, restoration of heritage sites, development of ski slopes and creation of tourist amenities.”

The chamber has suggested reduction of VAT on dairy products from 12.5 per cent to 4 per cent. Similar reduction should also be considered on biscuits, consumed by 50 per cent of rural population.