New Delhi: In a major relief to Himachal Pradesh, the central government has released the first instalment of ₹2,395 crore under the ‘Pride of Hills‘ scheme. The state has been navigating significant financial pressure following the end of the Revenue Deficit Grant (RDG).
The Centre had sanctioned a special financial assistance package of ₹3,920 crore for the state. Out of this, 60 per cent-amounting to ₹2,395 crore-has been transferred as an untied grant. The state government will use these funds to execute development projects and manage its immediate financial obligations.
Himachal Pradesh received ₹3,300 crore under the RDG during its final year. In the initial years, the grant stood at ₹11,000 crore, but the amount gradually decreased before the 16th Finance Commission discontinued it completely. The state government strongly opposed the decision, passed a special resolution in the Vidhan Sabha, and formally urged the Centre to restore the grant.
The remaining 40 per cent of the approved package under the scheme will be released in November for the 2026-27 financial year. This final instalment is also an untied grant, which will further stabilize state finances and keep development works on track.
The state’s total debt burden has reached ₹1.10 lakh crore, making central assistance critical to maintaining economic stability amid dwindling revenue sources.
Notably, Himachal Pradesh has received the first installment of ₹2,395 crore from the Central government under the newly introduced ‘Pride of Hills’ scheme. The total financial assistance sanctioned for the state under this initiative stands at ₹3,920 crore.
Expressing gratitude to Prime Minister Narendra Modi, Leader of Opposition and former Chief Minister Jairam Thakur thanked the Centre for granting the substantial package. He stated that the funds, released under the Special Assistance to States for Capital Investment (SASCI), will play a crucial role in the state’s development by boosting capital expenditure and strengthening infrastructure.
Thakur also urged the state government to ensure that the financial aid provided by the Centre is strictly utilized for its designated purposes.
What is the ‘Pride of Hills’ Scheme?
The ‘Pride of Hills’ initiative is a specialized sub-scheme under the Ministry of Finance’s ‘Special Assistance to States for Capital Investment’ (SASCI) program. Administered and implemented by the Department of Expenditure, the scheme is tailored specifically for the Northeastern and Himalayan states to help them overcome unique developmental hurdles posed by challenging geographical terrains.
