Govt to seek higher allocation from Finance Commission
The Himachal Government will seek the allocation of additional funds from the Finance Commission for preserving its forest wealth, which is providing invaluable ecological services worth Rs 90,000 crore to the country.
An additional memorandum to be submitted to the Finance Commission will be based on a report of the Indian Institute of Forest Management, Hyderabad, which is likely to be received next week. The state government had submitted a memorandum to the 16th Finance Commission when it visited Himachal on June 25, 2024, but Chief Minister Sukhvinder Singh Sukhu was keen to personally meet the Chairman of the NITI Aayog to submit the additional memorandum to seek enhanced Central assistance.
The report of the Indian Institute of Forest Management, Hyderabad, has assessed the value of ecological services that the entire country gets from forests in Himachal. There is a complete ban on the felling of trees in Himachal and the thrust is on enhancing the forest cover, which prevents floods and soil erosion and gives many other benefits.
The state government has already urged the Central Government to remove the cap on the loan raising limit and funds under externally-aided projects, considering limited avenues for revenue generation in Himachal. The state government laments that the cap on the loan raising limit is affecting development in the state.
The annual Budget of the state is around Rs 58,000 crore and around Rs 30,000 crore is spent on the payment of salary and pension to serving and retired government employees and the repayment of old loans and interest payment. This leaves very little money with the government for development works.
The revenue deficit grant (RDG) received in 2021 was over Rs 10,000 crore but it has reduced to mere Rs 3,200 crore in 2025-26. The debt liability of the state government has already crossed Rs 1 lakh crore, leaving practically no money for capital expenditure and making the going very tough for it.
The state government is keen that the award of the 16th Finance Commission is at least Rs 8,000 crore higher than the last allocation. This is essential as there is a gap of almost Rs 7,000 crore in the Budget with the expected revenue from many sources not being received due to legal fights and other factors.
The financial year 2025-26 is particularly difficult for the state government. The state is awaiting the disbursement of Rs 9,000 crore of Post Disaster Need Assessment (PDNA) funds from the Central Government for the damage suffered during the 2023 monsoon disaster.
Approval of Rs 8,000 crore more expected
- An additional memorandum to be submitted to the Finance Commission will be based on a report of the Indian Institute of Forest Management, Hyderabad, which is likely to be received next week
- The state government is keen that the award of the 16th Finance Commission is at least Rs 8,000 crore higher than the last allocation
- This is essential as there is a gap of almost Rs 7,000 crore in the Budget with the expected revenue from many sources not being received due to legal fights and other factors
Himachal Tribune