Himachal CM Sukhu Slams Union Budget as Anti-Poor and Anti-Farmer
Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu on Sunday launched a scathing critique of the Union Budget 2026-27, labeling it as "anti-poor and anti-farmer". The CM strongly objected to the Finance Commission's decision to withhold revenue deficit grants for the state, calling the move unjust despite multiple representations and detailed submissions by the government.
Unfair Discontinuation of Revenue Deficit Grants
"The Finance Commission has not recommended revenue deficit grants for small states, including Himachal Pradesh, which is a deeply disappointing and highly unfair," said Sukhu in Shimla on Sunday. He emphasized that Article 275(1) of the Constitution provides for state-specific grants from the Union government, also known as revenue deficit grants.
From 1952 up to the 15th Finance Commission, these grants were regularly provided by the Centre to the states. However, for the first time, the 16th Finance Commission has discontinued this grant. Under the 15th Finance Commission, grants amounting to approximately Rs 37,000 crore were provided to Himachal Pradesh.
The CM noted that after the 14th Finance Commission completed its term, and amid a delay in the submission of the 15th Finance Commission's report, Rs 11,431-crore assistance was still provided on the basis of an interim report during the tenure of the previous BJP government.
Overlooking Structural Fiscal Handicaps
Sukhu expressed disappointment that this omission overlooks structural fiscal handicaps faced by Himachal Pradesh, including:
- High forest and ecological cover of about 67 per cent
- Higher per-capita cost of service delivery in mountainous terrain
- Repeated natural disasters causing losses exceeding Rs 15,000 crore in recent years
"Himachal Pradesh anticipated targeted support for hill-specific priorities such as hydropower development, eco-tourism, road and rail connectivity, and compensation for revenue losses arising from GST implementation," said the CM.
Constrained Ability to Deliver Essential Services
The absence of adequate revenue deficit grants will constrain Himachal Pradesh's ability to:
- Deliver essential public services
- Maintain fiscal sustainability
- Invest in future growth
This situation may potentially force difficult choices between service delivery and increased indebtedness for the state government.
No Recognition for Apple Growers
The CM stated that the budget once again failed to respond to critical issues confronting the nation, particularly unemployment, poverty and escalating prices. He highlighted that apple growers of Himachal Pradesh, who make a vital contribution to the state's economy of around Rs 5,000 crore and support thousands of families, received no recognition in the Union Budget.
"It does not contain any substantial initiatives to tackle the persistent challenges in the agricultural sector, such as inadequate support prices and insufficient investment in advanced farming practices, infrastructure and modernisation," he said.
Overlooked Infrastructure and Tourism Development
Sukhu further criticized the budget for overlooking the long-pending issue of expanding the rail network in Himachal Pradesh. No allocations were made for railway expansion in the state, including key projects such as the Bhanupali-Bilaspur and Baddi-Chandigarh lines.
"It is a sad affair that despite Himachal Pradesh being home to world-renowned tourist destinations, the budget makes no specific provisions for tourism infrastructure development," said the CM. "While a Buddhist Circuit was proposed for the north-eastern states, it would have been appropriate to include the Buddhist Circuit of Himachal Pradesh as well."
He added that while the budget mentions development of mountain trails, concrete benefits for the state will depend on detailed guidelines yet to be issued.
Need for Special Provisions for Hill States
Sukhu emphasized that while the Union Budget prioritises capital investment, hill states require special provisions and higher central assistance for:
- Disaster-resilient infrastructure
- Road connectivity
- Tourism development
- Hydropower development
- Climate adaptation measures
"The allocation for interest-free loans to states, fixed at Rs 1.5 lakh crore, was not enhanced, and the stringent conditions attached to it do not support smaller states like Himachal Pradesh due to cost-related disadvantages," he added. "The discontinuation of GST compensation resulted in an annual revenue loss for the state."
BJP's Contrasting View and Industry Response
Meanwhile, BJP leaders, including leader of opposition Jai Ram Thakur, called it an "all-inclusive budget that fulfils the resolve of a developed India and paves the way for eco-tourism and infrastructure development for Himachal."
The hotel and restaurant associations welcomed the announcement of development of hiking trails and eco-tourism circuits in Himalayan states, including Himachal Pradesh. "This initiative will promote sustainable and responsible tourism while encouraging visitors to explore lesser-known destinations," said Ashwani Bamba, President of Hotel & Restaurant Association, Dharamshala. "It is expected to create employment opportunities for local youth, strengthen homestays, and help decongest heavily visited tourist towns."
