Where is the incentive for Himalayan states to protect their environment?

Himalayan states like Himachal and Uttarakhand are slowly going to pieces — literally — under the onslaught of cloudbursts, flash floods, land subsidence and collapsing infrastructure.

In just the last four years (2022–25), Himachal has lost 1,200 lives and suffered a loss of Rs 18,000 crore in these disasters (and this does not include the indirect loss to trade and economic activities).

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Whether these are natural disasters, as the government would like us to believe, or manmade disasters, is debatable; but that is not the focus of this piece and can be left for another day. I am on a larger and more fundamental point: Can the country afford the destruction of the Himalayas, and do these Himalayan states need help? 

North India and its Gangetic plains would not survive without the forests, the glaciers and  rivers that originate from Himachal and Uttarakhand, and would soon become a desert; these rivers sustain a population of almost 300 million people and are a lifeline for many cities. The Himalaya Hindukush  ranges help to moderate the climate, enable the monsoon precipitation and snow that recharge the rivers every year.

They contain some of Hinduism's most revered religious shrines and pilgrimages.

They are the green lungs which enable north India to breathe and provide relief to 40 million tourists every year.

We cannot afford to lose this landscape.

But losing them we are, because of financial compulsions.

Himalayan states like Himachal suffer from a double whammy: On the one hand they are in revenue deficit, because they have limited sources of income. They have no industrial or manufacturing base, services sector or surplus agriculture (other than the apple crop).

On the other hand, the cost of providing basic development to the people is double that of the plains, because of topographical and climatic reasons.

The only low-hanging source of income they have is their natural resources — the forests and rivers — and these are therefore being exploited ruthlessly for hydel projects and tourism, causing immense damage to the ecolog, and resulting in the death and destruction we have been witnessing in the last few years. (Himachal has diverted 11,000 hectares of dense forests for various non-forestry projects in the last 20 years alone.)

This is being further exacerbated by climate change, which is drastically altering the hydrology of the rivers, accelerating glacial melt and the threat of GLOF (glacial lake overflow).

The irony, and tragedy, is that this need not be a zero-sum game — if only the central government was to recognise the real wealth and contribution of these states to the national economy and well-being.

According to a 2025 report by the Institute of Forest Management, Bhopal, the total forest wealth of Himachal was valued at Rs 9.95 lakh crore. The report calculated the annual total economic value (TEV) of Himachal's forests at Rs 3.20 lakh crore — this includes Rs 1.65 lakh crore for carbon sequestration, Rs 68,941 crore for eco-system services, Rs 32,901 crore as the value of biodiversity, Rs 15,132 crore for water provisioning, Rs 3,000 crore for regulatory services such as flood control and sediment retention.

These contributions benefit the whole nation, not just Himachal. Unfortunately, these are neither acknowledged nor taken into account while disbursing central assistance to the states.

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But this must change.

Himachal (and other Himalayan states) must be compensated by the central government for their non-monetary, but vital, contribution to the country's well-being, quality of life and sectors such as agriculture, climate control, hydel power, carbon capture and tourism.

The mechanism to do so already exists — the Finance Commissions, which determine the formula for devolving central funds to the states. A beginning was made by the 12th Finance Commission, which allocated a total of Rs 1,000 crore for this purpose, which was termed a Green Bonus; the share of Himachal was a paltry Rs 20 crore.

This idea must be amplified and taken forward by the (current) 16th Finance Commission. The Himachal chief minister has taken up this matter of the creation of a Green Fund or Green Bonus with the chairman of the 16th Finance Commission, requesting an outlay of Rs 50,000 crore for incentivising the mountain states. This is an idea which must be considered seriously — the additional devolutions would go a long way towards ameliorating their financial condition and removing their present compulsion to ruthlessly exploit their forest and ecological capital to meet budget deficits.

Release of this money should be indexed to improvement in environmental parameters, sustainability of development and tourism projects, protection of rivers and curbing of illegal mining and construction.

In fact, the Supreme Court — which is holding suo moto hearings on the environmental devastation in Himachal and has said that at this rate the state would "vanish from the map of India", should also consider this issue and nudge the central government to create such a fund.

Protecting the Himalayas has to be seen as a shared responsibility, not as the concern of the mountain states alone.

If the Himalayas lose their forests, rivers and glaciers, it won't be long before north India goes the way of the Indus Valley civilisation.

Avay Shukla is a retired IAS officer and author of Holy Cows and Loose Cannons — the Duffer Zone Chronicles and other works. He blogs at avayshukla.blogspot.com 

More of his writing may be read here

Uttarakhand, India’s landslide capital