SHIMLA, Feb 6 – Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu on Friday announced that the state has secured NABARD approval for 73 development projects totaling 713.87 crore rupees ($86 million), as the hill state grapples with a massive projected revenue shortfall.
The announcement came during a high-level meeting with lawmakers from Una, Hamirpur, and Sirmaur districts to finalize development priorities for the 2026-27 fiscal year.
The funding package includes 512.31 crore rupees earmarked for 55 road and infrastructure projects under the Public Works Department, while 201.56 crore rupees will be directed toward 18 critical water initiatives managed by the Jal Shakti Department.
Fiscal Crisis Looms Over Mountain State
Despite the infrastructure progress, Sukhu issued a sharp rebuke of the 16th Finance Commission’s decision to discontinue the Revenue Deficit Grant (RDG) under Article 275(1) of the Constitution. The grant, a staple of state-federal fiscal relations since 1952, is vital for states with difficult terrain and limited industrial bases.
“Stopping this grant for the first time in over 70 years is an injustice to hill states,” Sukhu told officials. He estimated the policy shift could result in a cumulative loss of nearly 50,000 crore rupees ($6.02 billion) to the state exchequer.
The Chief Minister argued that Himachal Pradesh provides essential environmental services to the rest of India, including a total ban on commercial tree felling and the supply of river water to downstream states, which warrants continued federal support.
District-Level Priorities
During the session, local representatives highlighted urgent regional needs:
- Una: MLAs called for sewerage expansion in newly merged municipal villages and a 130-crore rupee upgrade to the Chintpurni Temple complex.
- Hamirpur: Requests centered on healthcare, including filling vacant specialist posts and completing a new Critical Care Unit in Bhoranj.
- Sirmaur: Focus remained on tourism potential, with calls for de-silting the sacred Shree Renukaji Lake and accelerating the introduction of lions to the local zoo to boost footfall.
A Call for Financial Resilience
With the federal budget reportedly ignoring subsidies for the state’s backbone apple and horticulture sectors, Sukhu signaled that Himachal would move toward “tough decisions” to bolster self-reliance and green energy initiatives.
The state government has set a deadline of March 15, 2026, for departments to utilize allocated budgets and submit reimbursement claims to NABARD to ensure no lapse in credit flow.
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