Himachal faces more than Rs. 10,000 Crore annual loss due to 16th Finance commission’s recommendation :Agnihotri
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SHIMLA 2 Feb, 2026
Deputy Chief Minister Mukesh Agnihotri while sharply criticizing the Central Government’s budget and the 16th Finance Commission’s recommendations, stated that these decisions will inflict a direct annual financial blow of approximately more than Rs. 10,000 crore on Himachal Pradesh.
Describing the move as a “long-term crisis” rather than a temporary setback, the Deputy CM asserted that the weakening of the state’s financial structure is completely unacceptable.
He said that it is a “Double Blow” to the State Economy as Himachal is already reeling under a dual economic impact in the form of GST earlier and now RDG. The cessation of GST compensation was the first major shock during the central BJP regime which had already proven detrimental to mountain states with limited revenue resources.
Secondly, abolition of the ‘Revenue Deficit Grant’ which was an institutional safeguard for states like ours, the Union Government has given a second major severe blow to the state’s fiscal health.
“Ending RDG is a policy injustice that undermines the very spirit of the federal structure,” stated Sh. Agnihotri. With a total state budget of approximately Rs. 58,000 crore, a significant portion is already committed to salaries, pensions and mandatory expenditures the Deputy CM said.
Over the last five years, Himachal received Rs.38,000 crore via RDG. Given current inflation and economic shifts, the state expected this to rise to Rs. 50,000 crore.
Launching scathing attack, he said that as of now the complete removal of this grant threatens to stall ongoing developmental projects and welfare schemes.
Sh. Agnihotri reminded the Center that Himachal Pradesh was formed with the understanding that its unique geography prevents it from being entirely self-reliant. Since 1952, it has been a national consensus that the Center would provide special financial assistance to the state of Himachal Pradesh.
He emphasized that Himachal’s dependence on central support was not a weakness but a part of the Center’s constitutional obligation toward a border and mountain state.
The Deputy Chief Minister posed a direct challenge to the BJP Members of Parliament from the state, as well as the Leader of Opposition and former CM Jai Ram Thakur who remained mere spectators failed to secure the rights of state.
He demanded clarity on whether they stand with the Central Government’s decision or with the interests of the people of Himachal. He said that silence on a matter involving a Rs. 10,000 crore annual loss was a compromise of the state’s future that the public will not forgive.
