Union Budget 2026 Wishlist: Himachal Pins Hopes On Centre For Green Fund

Cash-strapped Himachal Pradesh, North India’s only Congress-ruled state, is pinning its hopes on the Union Budget, seeking a dedicated “Green Fund” to sustain ecological conservation in the fragile hill state and protect its vast green cover.

The state, repeatedly hit by natural disasters and environmental issues, has been pressing the centre for creating a Rs 50,000 cr ‘Green Fund’ to help the hill states—known as the green frontiers of the nation.

Chief Minister Sukhwinder Singh Sukhu said, “I have personally raised this demand at various national platforms and submitted a proposal to Prime Minister Narendra Modi and Union Finance Minister Nirmala Sitharaman during a recent meeting.”

“Also, we have tried to convince the NITI Aayog about creating this fund with an earmarked annual allocation of Rs 50,000 crore for all hill states,” Sukhu informed here on Friday.

Sukhu said he has pleaded with the centre for the revised formula proposed by the state for horizontal devolution, increasing the weightage for the criteria of forest and ecology. The snow-covered-cum-cold desert areas above tree lines should be included along with very dense forests and moderately dense forest areas for their symbiotic relationship.

The Chief Minister said the state provides essential ecological services to the nation in the form of clean air, water, soil conservation, and a favourable climate.

In view of the recent monsoon disasters and growing incidences of cloudbursts, flash floods, and landslides, Himachal Pradesh needs special attention to fight the challenges of climate change and extreme weather events.

“It’s with this background that I urged Prime Minister Narendra Modi to announce a Green Fund of Rs 50,000 crore for 11 hill states of the country, which are the green frontiers, consistently fighting the adverse impacts of climate change,” he says, terming the hill states as ecological powerhouses delivering critical ecosystem services to the entire nation.

The chief minister maintains that the state government is committed to realising its vision of making Himachal a “Natural and Green State” and has made rapid progress in this direction.

“The word ‘natural’ reflects not just the scenic beauty of our state. It also defines the government’s approach to sustainable development,” he said. Across sectors—agriculture, horticulture, animal husbandry, forestry, industry, and transport—the focus remains the same. The government’s constant effort, he added, is to ensure that development stays aligned with environmental protection.

Referring to a study undertaken by the Indian Institute of Forest Management (IIFM), Bhopal, at the request of the Himachal government, the Chief Minister said Himachal Pradesh has been maintaining its forests that absorb huge quantities of atmospheric carbon dioxide, making a contribution to India’s climate change goals. The IIFM has estimated the carbon and climate regulation value provided by Himachal alone at Rs 1.65 lakh crore.

Himachal Pradesh has been persistently asking for a higher share of funding from the centre to invest in climate-resilient and ecologically sensitive development with sustainable infrastructure.

During the 10th Governing Council meeting of the NITI Aayog, chaired by Prime Minister Modi, Sukhu informed that the state has set out a target of making Himachal Pradesh a “green state” of India by introducing measures and initiatives that reduce dependency on the services causing pollution or harming the ecology.

Sukhu said, “In the coming years, Himachal will become a pioneering state in green hydrogen production in the country. A 1 MW green hydrogen plant is being set up in Solan district in collaboration with Oil India Limited.”

If the state uses nearly 90 percent renewable or green energy sources for its total energy consumption of about 14,000 million units, Himachal Pradesh can truly call itself a “Green State.”

In November 2025, the Constitutional Conduct Group—comprising retired bureaucrats—submitted a memorandum to the 16th Finance Commission, justifying the “green bonus” for Himalayan states such as Uttarakhand, Sikkim, and Jammu & Kashmir, arguing that existing fiscal formulas fail to adequately account for their environmental burdens.

Sukhu announced that the government will initiate a technical and scientific assessment of Himachal Pradesh’s ecological contribution to the nation’s environment, which, according to preliminary estimates, could fetch the state around Rs 90,000 crore annually, if approved.