Himachal CM Sukhu terms Union Budget ‘inequitable’, raises concerns over Finance Commission report

Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu on Sunday (February 1, 2026) termed the Union Budget 2026-27 “inequitable,” as it was ‘anti-poor and anti-farmer’ that ignores the interests of key sections of the society.

The Chief Minister said the Budget overlooked the concerns and priorities of Himachal Pradesh, even as he raised serious concerns regarding the recently tabled 16th Finance Commission (FC-XVI) Report for the period 2026-31.

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He expressed disappointment over the Commission’s failure to provide meaningful Revenue Deficit Grants (RDGs) for the State. The Finance Commission has not recommended RDGs for small States, including Himachal Pradesh, which he termed a deeply disappointing decision and termed it as an injustice, hurting the sentiments of the people.

“Article 275(1) of the Constitution provides for State-specific grants from the Union government, also known as RDG. From 1952 up to the Fifteenth Finance Commission, these grants were regularly provided by the Centre to the States. However, for the first time, the Sixteenth Finance Commission has discontinued this grant. It is sad that this omission overlooks structural fiscal handicaps, including high forest and ecological cover of about 67%, higher per-capita cost of service delivery in mountainous terrain and repeated natural disasters causing losses exceeding ₹15,000 crore in recent years,” he said addressing a press conference in Shimla.

Mr. Sukhu said the absence of adequate RDGs will constrain Himachal Pradesh’s ability to deliver essential public services, maintain fiscal sustainability and invest in future growth, potentially forcing difficult choices between service delivery and increased indebtedness.

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“As a special category hill state, Himachal Pradesh faces unique challenges due to its difficult terrain, fragile ecology, frequent natural disasters and a limited own-revenue base. In this context, stronger fiscal support, particularly a clear framework for continued RDGs beyond the current Finance Commission period, is critical for maintaining fiscal balance, delivering essential public services and sustaining social welfare commitments,” he said.

“The Budget has once again failed to respond to the critical issues confronting the nation, particularly unemployment, poverty and escalating prices. The apple growers of Himachal, who make a vital contribution to State’s economy of around ₹5000 crore and support thousands of families, have received no recognition in the Union Budget,” he added.