Shimla, Feb 1,
Himachal Pradesh is expected to receive an estimated Rs 1.3 lakh crore during the five-year award period 2026-27 to 2030-31 under the Sixteenth Finance Commission, indicating a significant rise in central transfers compared to the previous Finance Commission cycle.
The estimate is based on the first-year allocation figures and prevailing trends in tax devolution and grants-in-aid.
As per the Budget Estimates for 2026-27 presented by Union Minister Nirmala Sitharaman, Himachal Pradesh’s share in central taxes has been pegged at around Rs 13,950 crore, following the continuation of 41 per cent devolution of the divisible pool to states. This amount forms the base for calculating the likely transfers over the full five-year period.
Assuming a modest annual growth of about 8 per cent in the divisible pool of central taxes, the state’s cumulative share from tax devolution alone is projected to cross Rs 81,000 crore between 2026-27 and 2030-31.
In addition, Himachal Pradesh is expected to receive substantial grants-in-aid, given its hill-state status, limited revenue base and higher expenditure needs.
These grants are likely to include revenue deficit grants, disaster management assistance and support for rural and urban local bodies. On current trends, total grants-in-aid for the five-year period are estimated to be in the range of Rs 45,000 crore to Rs 50,000 crore.
Taken together, the overall central transfers to Himachal Pradesh during the 16th Finance Commission period are projected to be anywhere between Rs 1.26 lakh crore and Rs 1.32 lakh crore, marking a sharp increase of nearly 50 per cent over the approximately Rs 82,000 crore recommended for the state during the 2021-26 period by the previous Finance Commission.
The report of the Sixteenth Finance Commission was laid in Parliament on Tuesday by Union Finance Minister Nirmala Sitharaman, shortly after the presentation of the Union Budget for the financial year 2026-27. The report outlines the framework for tax devolution and grants to states for the next five years.
For Himachal Pradesh, which remains heavily dependent on central transfers to meet committed expenditure and disaster-related liabilities, the projected allocation is expected to provide much-needed fiscal relief, even as long-term concerns over debt and revenue mobilisation persist.
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The HimachalScape Bureau comprises seasoned journalists from Himachal Pradesh with over 25 years of experience in leading media conglomerates such as The Times of India and United News of India. Known for their in-depth regional insights, the team brings credible, research-driven, and balanced reportage on Himachal’s socio-political and developmental landscape.
