The 31st state of Bilaspur, which had been until then a separate entity under the control of the Chief Commissioner, was integrated with Himachal Pradesh on 1 July 1954 thereby adding one more district to the state.

The main reason why Bilaspur was made a separate state, instead of being merged with Himachal Pradesh from the beginning, was because of the ongoing construction of the Bhakra Dam in the area.

This was expected to cause extensive flooding that would displace a lot of people, who would then need to receive compensation as well as be relocated.

Class "C" States were under the direct rule of the Central Government.

In 1954, when Bilaspur was merged with Himachal Pradesh, the strength of its Assembly was raised to 41.