Shimla, Feb 16,
” Governor omits Finance Commission paras in address as budget session commences”
The Budget Session of the 14th Himachal Pradesh Legislative Assembly commenced on Monday with the ceremonial address by Governor Shiv Pratap Shukla, formally marking the beginning of the first leg of the session scheduled to continue till February 18.
Welcoming members to the 11th session of the 14th Assembly, the Governor stated that the House had been convened to transact key financial business, including Supplementary Demands for Grants for 2025–26 and the presentation and discussion of Budget Estimates for 2026–27, along with other legislative matters. He expressed confidence that the Assembly would continue the tradition of constructive and informed deliberations.
However, in an unusual development, the Governor informed the House that he would not read paragraphs 3 to 16 of the prepared address. He stated that these portions referred to a constitutional body and related issues. He further indicated that the paragraphs detailing achievements of “my government” were matters for debate among members. The address concluded in approximately three minutes, after which the House was adjourned briefly.
RDG discontinuation figures in address
The portions not read out (Paras 3 to 16) pertained to the recommendations of the 16th Finance Commission, constituted on December 31, 2023, to make recommendations for the five-year period from April 1, 2026 to March 31, 2031. The Commission submitted its report to the President on November 17, 2025; it was laid in Parliament on February 1, 2026 and subsequently accepted by the Union Government.
According to the address text, the Revenue Deficit Grant (RDG) — which has historically supported smaller and hill States — has not been recommended by the 16th Finance Commission. The address noted that previous Finance Commissions from the First (1952) up to the Fifteenth (2020–25) had recommended RDG. Under the Fifteenth Finance Commission, Himachal Pradesh was recommended approximately Rs 48,630 crore for 2020–21 to 2025–26.
The document highlighted that RDG constituted nearly 12.7 per cent of the State’s Budget — the second highest share in the country after Nagaland — and stated that its discontinuation may have implications for fiscal planning, given the State’s geo-climatic and cost-related constraints.
It further noted that while the State’s share in Central taxes and certain grants has increased, grants for Urban Local Bodies have reduced from Rs 855 crore to Rs 435 crore. The net assessed deficit has been estimated at around Rs 33,195 crore in nominal terms.
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