Chandigarh's Union Budget Allocation Dips by Rs 437.66 Crore, Political Parties Voice Concerns
Chandigarh has been allocated Rs 6,545.52 crore in the Union Budget for the fiscal year 2026-27, marking a reduction of Rs 437.66 crore compared to the Budget Estimates of Rs 6,983.18 crore for 2025-26. The announcement, made by Finance Minister Nirmala Sitharaman in the Lok Sabha, has sparked criticism from the Aam Aadmi Party (AAP) and the Congress, who argue that the cut will severely strain civic services and infrastructure development in the city.
Administration's Perspective: Structural Correction and Real Increase
Despite the apparent reduction, the UT Administration has described the allocation as a 4.63 per cent increase in real terms after adjusting for the privatisation of the electricity department. Officials attribute the lower figure to a structural correction following this move, which reduced the core energy-sector allocation from Rs 877.39 crore in 2025-26 to Rs 156.95 crore in 2026-27—an adjustment of Rs 720.44 crore. Excluding this one-time change, the administration claims the budget reflects an actual increase of Rs 282.28 crore over the previous fiscal.
The UT Administration had initially projected a requirement of Rs 8,379.81 crore for 2026-27, seeking an additional Rs 1,396.63 crore to fund health, education, transport, and urban infrastructure projects. However, the final allocation comprises Rs 5,939.52 crore under the revenue head, largely spent on salaries and recurring expenses, and Rs 606 crore for capital expenditure, aimed at development works and asset creation.
Political Criticism: Underutilisation and Governance Focus
Chandigarh MP Manish Tewari of the Congress has criticised the reduction, linking it to poor fund utilisation by the UT administration. He noted that while the 2025-26 allocation was Rs 6,187 crore, revised estimates showed only Rs 5,556 crore was spent, leaving an underspend of over Rs 630 crore. Tewari argued that this underutilisation has led to a lower allocation of Rs 5,720 crore in 2026-27, which he says should not be seen as fiscal prudence but as a lack of focus in governance.
The AAP and Congress have both expressed concerns that the reduced outlay will directly impact urban infrastructure, healthcare, and public services. Senior AAP leader Vikrant A Tanwar highlighted that the UT Budget for 2026-27 is pegged at Rs 5,720 crore, down from a revised expenditure of Rs 6,187 crore in 2025-26. He warned that high administrative spending coupled with limited funds could hinder development works, particularly due to the absence of a clearly defined allocation for the Municipal Corporation, potentially affecting roads, sanitation, and drainage.
Congress chief spokesperson Rajiv Sharma termed the reduction of over Rs 1,200 crore compared to the original 2025-26 allocation as unfair and unprecedented, alleging indifferent treatment towards the city. He pointed out that the Corporation received only Rs 625 crore as grant-in-aid last year, with nearly Rs 500 crore likely to lapse due to underutilisation. Sharma emphasised that the civic body, responsible for most day-to-day works, gets barely 9 per cent of the total allocation despite a severe resource crunch. Both parties have demanded assured and transparent funding for the Corporation to prevent deterioration of essential civic services.
Sector-Wise Allocation Breakdown
Six major sectors account for Rs 4,998.45 crore, or 76.37% of the UT's total budget allocation:
- Education: Receives the highest allocation of Rs 1,295.38 crore (19.79%), earmarked for modernisation, NCC infrastructure, graduate course expansion, and new polytechnics.
- Housing and Urban Development: Allocated Rs 1,127.95 crore (17.23%) for land acquisition, urban roads, storm-water drainage, and projects like pan-city 24x7 water supply.
- Police: Granted Rs 970.53 crore (14.83%).
- Health Services: Receives Rs 955.41 crore (14.60%) to upgrade a community health centre, strengthen polyclinics, and implement healthcare programmes.
- Transport: Allocated Rs 459.51 crore (7.02%) for new buses, bus stand modernisation, and intercity transport initiatives.
- Other Sectors: Together account for Rs 1,547.07 crore (23.63%), including social welfare, forestry, and miscellaneous heads.
In the final Budget Estimates, the energy sector has been provided Rs 189.67 crore, focusing on renewable energy initiatives and the model solar city programme, reflecting residual components post-restructuring.
The debate over Chandigarh's budget highlights ongoing tensions between fiscal adjustments and the need for robust public service funding, with political parties urging greater accountability and resource allocation to sustain the city's infrastructure and civic amenities.
