Union Budget 2026: End of Revenue Deficit Grant Hits Himachal, Mountain Trail Gets Green Signal
The Union Budget 2026 has brought a major financial shift for Himachal Pradesh. The end of the Revenue Deficit Grant (RDG) for states has dealt a significant blow to the state. Under the 15th Finance Commission, Himachal had received a total of ₹37,199 crore in revenue deficit grants between 2021 and 2026.
Chief Minister Sukhvinder Singh Sukhu described the move as a "black day" for the state, saying it undermines the federal framework and shows indifference toward the needs of hill states.
However, the state also received a positive announcement. Finance Minister Nirmala Sitharaman, in her budget speech, announced the Mountain Trail project for Himachal Pradesh. The initiative will develop new trekking routes, providing tourists with additional adventure activities. The state government will submit a proposal to the Centre for budget approval.
Himachal will also receive its fixed share of GST, with BJP claiming a 10% increase in the state’s GST share. Additionally, under the recommendations of the 16th Finance Commission, grants for Panchayats and urban bodies, along with disaster grants, will continue. For FY 2026-27, Himachal will receive ₹539 crore in disaster grants, including ₹431 crore under SDRF and ₹108 crore under SDMF.
Former Chief Minister and Leader of Opposition Jairam Thakur called the Mountain Trail initiative a revolutionary step for Himachal, highlighting that a 10% increase in tax devolution provides the state with a buffer to support development.
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