Uttarakhand is set to receive a major financial boost in the financial year 2026-27, raising hopes for accelerated development in infrastructure, tourism, pilgrimage circuits and the expansion of basic facilities in remote rural areas. Based on the recommendations of the 16th Finance Commission, the state will receive Rs 17,414.57 crore as its share of central taxes.
When capital investment assistance, pending funds under the Jal Jeevan Mission and incentives linked to centrally sponsored schemes are included, total central assistance to the state is expected to reach nearly Rs 24,000 crore. This marks an increase of over Rs 9,000 crore compared to the previous financial year.
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The 16th Finance Commission’s recommendations, approved by the Centre, will result in Uttarakhand receiving an additional Rs 1,841.16 crore in tax devolution compared to 2025-26. Urban local bodies and rural panchayats are also set to benefit, with grants increased by Rs 3,160 crore over five years compared to the previous commission. This translates to an annual increase of around Rs 620 crore to strengthen local governance and resource mobilisation.
However, the state has also faced a setback, as the 16th Finance Commission has discontinued the revenue deficit grant. Under the 15th Finance Commission, Uttarakhand had received Rs 28,147 crore as revenue deficit support between 2021 and 2026. The withdrawal of this grant is expected to impact the state’s finances. Additionally, allocations under the disaster management head have been reduced by 4.33 per cent, though the commission has recommended Rs 5,504 crore for disaster management over five years, with a central share of Rs 4,953.60 crore, amounting to nearly Rs 990 crore annually.
The state is also expected to receive relief through increased interest-free loans under the Scheme for Special Assistance to States for Capital Investment, with Uttarakhand likely to get around Rs 2,000 crore. The extension of the Jal Jeevan Mission until 2028 and a national allocation of Rs 67,670 crore raise hopes that Uttarakhand will receive pending dues of about Rs 3,500 crore, along with its regular annual share.
With enhanced allocations across nearly 10 centrally sponsored schemes, the state is expected to receive more than Rs 9,000 crore in additional central assistance in the coming year.
Chief Minister Pushkar Singh Dhami said the Union Budget 2026-27 would give a new direction to development at both the national and state levels, with a focus on employment, education, health, tourism, skill development, women’s empowerment and infrastructure. He added that the budget would provide equal development opportunities to hill states like Uttarakhand and strengthen the rural and mountain economy, with the state government committed to effective implementation of the announced provisions.