With the withdrawal of the Revenue Deficit Grant (RDG) looming large, Himachal Pradesh is set to witness one of its most challenging Budgets in recent years.
Chief Minister Sukhvinder Singh Sukhu, who also holds the Finance portfolio, will present the Budget for 2026-27 in the Vidhan Sabha on March 20.
The Finance Department is in the final stages of preparation for what will be Sukhu’s fourth Budget. However, the exercise comes against the backdrop of the 16th Finance Commission’s recommendation to discontinue the RDG, a move that could result in an annual loss of nearly Rs 10,000 crore for the hill state.
The grant has long served as a crucial cushion for Himachal, given its limited avenues for revenue generation and the high cost of maintaining infrastructure in difficult mountainous terrain.
The likely withdrawal of RDG has intensified fiscal pressure on the government, raising the possibility of new taxes or enhanced levies as part of a broader push for resource mobilisation.
Simultaneously, the government is expected to focus on pruning non-essential expenditure and tightening fiscal discipline to manage the anticipated shortfall.
Industries and Parliamentary Affairs Minister Harshwardhan Chauhan confirmed that the second phase of the Budget session will resume on March 18.
The Budget will be debated for three days from March 23 to 25, followed by discussion and voting on cut motions on March 27 and 28. The Budget is slated to be passed on March 28.
The first phase of the session began with the Governor’s Address on March 16 and was later adjourned by Speaker Kuldeep Singh Pathania.
The debate on the Motion of Thanks will take place on March 18 and 19, after which the Chief Minister will reply.
Ahead of the Budget, Sukhu met Union Finance Minister Nirmala Sitharaman in New Delhi, seeking special central assistance and urging that Himachal’s unique constraints not be equated with other states facing RDG withdrawal.
Any relief from the Centre remains uncertain as the state prepares for a fiscally tight year ahead.
