Shimla: In a significant relief for Himachal Pradesh amid growing financial strain, the Central Government has rolled out a special assistance package for hill states, under which the state will receive ₹3,920 crore for developmental works.
The assistance comes under a newly created ₹25,000 crore fund titled ‘Pride of Hills—Special Development Assistance for the Hill States under SASCI’, carved out specifically to support nine hill states. The move gains importance as Himachal has been facing fiscal pressure following the discontinuation of the revenue deficit grant by the 16th Finance Commission.
The funds are allocated exclusively for development projects, including roads, healthcare, education, and basic infrastructure. However, unlike earlier grants, the assistance will be provided in the form of long-term, interest-free loans, raising concerns about future repayment burdens on the already stretched state finances.
In addition to this special package, the 16th Finance Commission has marginally increased Himachal’s share in central funds from 0.83 percent to 0.90 percent, which is expected to improve fund flow to the state.
The ‘Pride of Hills’ initiative is part of the broader Scheme for Special Assistance to States for Capital Investment (SASCI), which has a total corpus ranging between ₹1.5 lakh crore and ₹1.75 lakh crore. Out of this, ₹25,000 crore has been specifically allocated for hill states, while the remaining funds will be distributed among states based on their respective shares.
Among the beneficiary states, Arunachal Pradesh has received the highest allocation of ₹4,900 crore, followed by Himachal Pradesh with ₹3,920 crore. Uttarakhand has been allocated ₹3,460 crore, Tripura ₹3,450 crore, Nagaland ₹3,380 crore, Manipur ₹2,400 crore, Meghalaya ₹2,070 crore, Sikkim ₹820 crore, and Mizoram ₹100 crore.
The package is expected to provide a much-needed push to infrastructure and development projects in Himachal, where financial constraints have slowed down capital expenditure in recent years. Sectors such as road connectivity, healthcare infrastructure, and education are likely to benefit from the additional funding.
Despite the relief, financial experts point out that the shift from grants to loans may add to the state’s long-term liabilities. With rising debt and a large share of revenue already committed to salaries, pensions, and interest payments, the effective utilisation of these funds will be crucial.
