Addressing a press conference today, Chief Minister Thakur Sukhwinder Singh Sukhu said that the budget presented by the Central Government for 2026-27 clearly exposes the indifference of the Central Government towards the needs of the common people, middle class, farmers, gardeners and especially the hill states.
He said that the people of Himachal Pradesh are disappointed with this budget. The middle class expected relief in income tax, but the central government completely ignored the rising inflation and economic pressures. The Chief Minister said that under Article 275 (1) of the Constitution, there is a provision for giving state-specific grants to the states by the Central Government, which is called Revenue Deficit Grant (RDG). From the year 1952 till the formation of the 15th Finance Commission, these grants were regularly given to the states by the Central Government. But for the first time the 16th Finance Commission has stopped this grant.
He said that during the 15th Finance Commission, revenue deficit grants of about Rs 37,000 crore were given. He also reminded that after the expiry of the tenure of the 14th Finance Commission, when there was a delay in the submission of the report of the 15th Finance Commission, even during the tenure of the previous BJP government, assistance of Rs 11,431 crore was provided to the states on the basis of the interim report.
Even more worrying is the 16th Finance Commission’s non-recommendation of Revenue Deficit Grant (RDG) for small and hilly states like Himachal Pradesh. The decision is a blatant disregard of the state’s structural financial challenges, less than 67 per cent forest and ecological cover, higher per capita cost of service delivery in hilly areas and natural disaster losses of over Rs 15,000 crore in recent years.
Thakur Sukhwinder Singh Sukhu said that the abolition of RDG would seriously impact Himachal Pradesh’s financial stability, delivery of essential public services and developmental investments. This will force the state to take difficult decisions between service delivery and rising debt. He said that despite repeated submissions, detailed memorandums and technical presentations, the Central Government and the Finance Commission ignored the realities of Himachal Pradesh which was unfortunate. This situation further strengthens the apprehension that the BJP-ruled central government is giving step-motherly treatment to the Congress-ruled states.
The provisions made for the agricultural sector are inadequate for a hilly state like Himachal, where the geographical conditions and costs of farming are completely different from the plain states of the country. Apple growers, who contribute approximately Rs 5,000 crore to the state’s economy and are the basis of livelihood of thousands of families, received no recognition, no assistance and no policy support in this budget. This is a direct injustice to the gardeners and an attack on the economy of Himachal.
He said that tourism is the identity of Himachal Pradesh and the main source of employment, no special provision was made in the budget for this sector. The proposal for a Buddhist circuit for the North-Eastern states is welcome, but keeping Himachal Pradesh, home to world-famous Buddhist sites, out of it shows clear discrimination. Development of mountain routes has been announced, but actual benefits have been left to vague future guidelines.
He said no allocation was made for important projects like railway expansion to Bhanupalli, Drbilaspur and Baddirichandigarh. The Chief Minister also stressed on increasing the loan limit from three percent to four percent.
He said that even though the central government talks about capital investment in the budget, there is no concrete or special assistance visible for the hill states to solve the challenges related to disaster protection, road-rail connectivity, hydropower, tourism and climate. Separate disaster risk indices and ecological indicators for the Himalayan states should have been given priority in financial disbursement. The Union Budget 2026-27 shows neither the path of development nor justice for Himachal Pradesh.
He said that the amount of interest-free loan given to the states has been limited to Rs 1.5 lakh crore and no increase has been made in it. Also, the stringent conditions attached to it are not suitable for small and hilly states like Himachal, as the cost of development is higher here. Apart from this, the state is facing huge revenue loss every year due to closure of GST compensation.
This budget is anti-people, anti-farmer and anti-Himachal. The Government of Himachal is committed to financial discipline and administrative efficiency, but expects the Central Government to adopt the spirit of dialogue, sensitivity and cooperative federalism with the States. India’s inclusive development is not possible by ignoring Himachal Pradesh. The state government will continue to raise its voice strongly against injustice towards the state and its people.
