Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu on Sunday expressed strong disappointment over the Union Budget 2026–27, saying it ignored the interests of hill states and failed to provide any separate assistance for disaster-affected Himachal Pradesh.
Calling the budget “inequitable” and a “labyrinth of neglect”, Sukhu said it was anti-poor and anti-farmer, and accused the Centre of unfair distribution of resources. He said Finance Minister Nirmala Sitharaman had overlooked the concerns and priorities of Himachal Pradesh.
FINANCE COMMISSION ‘DENIES’ REVENUE DEFICIT GRANTS
The Chief Minister also criticised the recently tabled 16th Finance Commission (FC-XVI) report for 2026–31, particularly its decision not to recommend Revenue Deficit Grants (RDGs) for small states, including Himachal Pradesh.
Despite repeated representations, detailed memoranda and technical submissions, the state’s demand for RDGs was ignored, Sukhu said, calling the decision unjust and deeply disappointing. He pointed out that Article 275(1) of the Constitution provides for state-specific grants, which had been extended regularly from 1952 until the Fifteenth Finance Commission.
“For the first time, the Sixteenth Finance Commission has discontinued this grant,” he said, noting that Himachal Pradesh had received around Rs 37,000 crore as RDGs under the Fifteenth Finance Commission. He added that interim assistance of Rs 11,431 crore was provided during delays after the Fourteenth Finance Commission.
DISASTER LOSSES, TERRAIN COSTS OVERLOOKED
Sukhu said the Finance Commission’s recommendations failed to account for Himachal Pradesh’s structural fiscal handicaps, including its high forest and ecological cover of about 67 per cent, higher per-capita service delivery costs in mountainous terrain, and repeated natural disasters that have caused losses exceeding Rs 15,000 crore in recent years.
He said the state had expected targeted support for hill-specific needs such as hydropower development, eco-tourism, road and rail connectivity, and compensation for revenue losses arising from GST implementation.
GROWERS, RAIL PROJECTS LEFT OUT
Warning that the absence of adequate RDGs would constrain public service delivery and force difficult fiscal choices, Sukhu said the budget had also failed to address unemployment, poverty and rising prices.
He flagged the lack of any specific support for apple growers, who contribute around Rs 5,000 crore to the state’s economy, and criticised the absence of allocations for railway expansion, including projects such as the Bhanupali–Bilaspur and Baddi–Chandigarh lines. His demand to raise the state’s borrowing limit to 4 per cent from the current 3 per cent was also ignored, he said.
TOURISM, CLIMATE NEED SPECIAL SUPPORT
The Chief Minister said that despite Himachal Pradesh being home to major tourist destinations, the budget made no specific provision for tourism infrastructure. While a Buddhist Circuit has been proposed for northeastern states, he said Himachal Pradesh’s circuit should also have been included.
Emphasising that hill states face unique challenges, Sukhu said higher central assistance was needed for disaster-resilient infrastructure, climate adaptation, hydropower development and connectivity. Greater flexibility in centrally sponsored schemes, higher weightage for ecological indicators in fiscal devolution, and a separate Disaster Risk Index for Himalayan states would have strengthened cooperative federalism, he added.
As a special category hill state with a fragile ecology and limited revenue base, Himachal Pradesh requires sustained fiscal support, Sukhu said, stressing that a clear framework for continued Revenue Deficit Grants beyond the current Finance Commission period was essential to maintain fiscal balance and deliver essential public services.
– Ends
Published By:
Priyanka Kumari
Published On:
Feb 1, 2026
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