HP govt bets on lotteries to plug budget hole

HIMACHAL Pradesh’s decision to lift the two-decade-old ban on state-run lotteries marks a pragmatic turn in fiscal policymaking. With debt piling up and revenue streams strained, the cash-starved hill state is turning to an old but proven source of income — lotteries. Though controversial, lotteries are legal and revenue-generating, as seen in states like Kerala, Maharashtra and Punjab, where lottery revenues contribute significantly to the exchequer. Kerala is projected to earn a whopping Rs 13,244 crore from ticket sales in FY25 alone while Punjab expects Rs 235 crore this fiscal.

In fact, in Kerala, lottery proceeds are used to fund welfare schemes, including health insurance for the poor. If regulated well, lotteries can serve a dual purpose: mobilising resources and financing social development. Himachal, currently grappling with the financial aftermath of natural disasters and a sluggish economy, has few easy options left. The expected revenue from lottery sales can ease its fiscal burden. It is argued — not without reason — that lotteries are a ‘sin economy’, exploiting the poor and leading to personal financial ruin. Incidents of addiction and suicides must not be brushed under the carpet. However, the modern regulatory regime offers tighter control and GST already imposes a ‘sin tax’ on lottery sales, akin to alcohol and tobacco. It is not the lottery that ruins families — it is lack of oversight, financial illiteracy and unchecked marketing.

The question is not whether lotteries are perfect but whether they are better than borrowing more or cutting public services. In the absence of a bailout from the Centre and amid mounting Opposition attacks, the Sukhu government needs immediate, sustainable revenues. If run transparently, with a clear earmarking of funds for welfare schemes, Himachal’s lottery revival could be a bold yet responsible gamble.

Editorials