The present paper is an attempt to study the “The Growth of Revenue and Expenditure on Forestry in Himachal Pradesh”. Forests play an important role in an economy. Their growth is sine-qua-non for the process of economic development in both hilly and plain states. In hilly state like Himachal Pradesh, the scope of agricultural development is limited due to scarce and poor agricultural land and difficult geographical terrains as well as extreme weather conditions. As far as the scope of setting modern industrial units is concerned, it is also quite limited due to various economic and non-economic factors. Therefore, in this back drop, one simple choice lying before the Government is to strengthen its forest sector further. Forests can be a source of both revenue as well as ecological protection in the state. Here, in context to the significant role, which forestry plays, it is important that an attempt should be made to study the sources of revenue as well as the types of expenditure on forestry in Himachal Pradesh. It is not merely the sources of revenue from forestry which is important rather it is the type of expenditure which is more relevant from policy point of view. It is essential to know that which particular sources of revenue are gaining popularity in the state and which ones have lost significance, over a period of time.