In a significant gathering of federal and state leadership, both Punjab and Himachal Pradesh recently sought substantial financial packages from NITI Aayog, articulating their unique challenges and pressing development imperatives. The occasion was the 10th Governing Council meeting of NITI Aayog, held on Saturday, May 24, 2025, in New Delhi, chaired by Prime Minister Narendra Modi. Chief Minister Bhagwant Mann represented Punjab, while Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu presented his state’s compelling case, both advocating for increased central assistance to address their distinct economic, geographical, and strategic concerns within the broader framework of national development.
Punjab, a state with an invaluable agricultural heritage and a crucial role in India’s food security, currently grapples with a multifaceted crisis that demands urgent central intervention. Chief Minister Bhagwant Mann, during his comprehensive presentation, meticulously highlighted the dire financial situation, burdened by a significant debt and recurring revenue deficits, which severely constrains the state’s inherent ability to undertake crucial development projects and invest in future growth.
The agrarian sector, while historically Punjab’s very backbone and source of national food security, is facing unprecedented challenges, most notably rapid groundwater depletion due to excessive paddy cultivation. This practice, while feeding the nation, is largely sustained by central procurement policies and has led to a severe ecological imbalance. Mann explicitly sought a substantial cash incentive of ₹17,500 per hectare for maize cultivation to vigorously encourage crop diversification away from water-guzzling paddy, a crucial and environmentally responsible step towards ecological balance and agricultural sustainability.
He also stressed the urgent need for a ₹600 crore grant for desilting the Harike headworks, a vital intervention for efficiently managing water resources and mitigating severe flood risks along the Sutlej and Beas rivers, areas particularly vulnerable to water-related disasters.Beyond the immediate agricultural concerns, Punjab’s unique and critical position as a border state presents a distinct set of intertwined security and developmental challenges. Mann eloquently highlighted the inherent disadvantages faced by industries operating in the state’s six border districts – Amritsar, Gurdaspur, Tarn Taran, Ferozepur, Fazilka, and Pathankot – due to their continuous proximity to the international border with Pakistan.
He passionately sought a special industrial package specifically tailored for these strategically sensitive areas. This comprehensive package would ideally include robust production-linked incentive (PLI) schemes, essential freight subsidies, significant tax reliefs, and the establishment of dedicated agro-zones, advocating for complete parity with incentives currently offered to geographically similar regions like Jammu and Kashmir, which receive enhanced central support. Furthermore, he appealed vehemently for substantial infrastructure grants for border resilience, encompassing the establishment of advanced trauma centers, secure bunkers, enhanced cyber security measures, and truly resilient infrastructure in these high-risk areas, where only a limited number of villages are currently covered under existing central schemes.
A highly significant demand was also made for an upward revision of compensation to farmers owning land situated between the border fence and the international boundary, seeking an increase from the current ₹10,000 to a more equitable ₹30,000 per acre per year, acknowledging their unique challenges and sacrifices. The Chief Minister also sought a substantial grant of ₹2,829 crore specifically for bolstering border security and combating rampant drug trafficking, emphasizing the critical need for funds to upgrade surveillance infrastructure, enhance jail security, and bolster de-addiction efforts, citing thousands of arrests and significant heroin seizures in recent anti-drug operations.
He also proposed the strategic development of an economic corridor along the Delhi-Katra Expressway to fundamentally revitalize Punjab’s economy, envisioning it as a dynamic industrial and logistics hub that would connect key regions and facilitate seamless movement of goods and services, attracting vital investment.
Himachal Pradesh, under the leadership of Chief Minister Sukhvinder Singh Sukhu, presented its compelling case from the perspective of a sensitive hill state, grappling with unique geographical, environmental, and ecological constraints. Sukhu meticulously underscored the significantly higher cost of infrastructure development inherent in mountainous terrains, a factor that profoundly impacts everything from the construction of critical roads and essential connectivity networks to the provision of basic public utilities.
He reiterated the state’s long-standing demand for a comprehensive “Green Bonus,” arguing convincingly that Himachal Pradesh, often affectionately referred to as the “lungs of North India,” contributes immensely to preserving vital forest cover, rich biodiversity, and overall ecological balance for the entire northern plains. He stressed unequivocally that the state should be adequately compensated for its monumental environmental conservation efforts, which undeniably come at a substantial developmental cost and sacrifice.
Sukhu further articulated the state’s ambitious vision to become a “Green Energy State” by March 31, 2026, emphasizing pioneering initiatives like green hydrogen production and passionately advocating for increased royalty from existing hydropower projects, particularly those under central public sector undertakings (CPSUs) that have completed 40 years of operation, seeking their reversion to state control.
The Himachal Chief Minister also highlighted the state’s acute vulnerability to recurring natural calamities, such as devastating flash floods, catastrophic landslides, and severe cloudbursts, which necessitate substantial and immediate central assistance for robust disaster management, comprehensive relief operations, and crucial rebuilding efforts. He sought a higher allocation of funds for hill states by strategically relaxing existing eligibility criteria in various central schemes, arguing persuasively that their distinct and often overlooked needs frequently get marginalized within generic policy frameworks designed for plain areas.
A crucial demand was the immediate release of long-pending central dues to the state, with Sukhu asserting that the timely release of these legitimate funds would enable Himachal Pradesh to genuinely become self-reliant, envisioning a self-reliant Himachal by 2032. Furthermore, he sought a decisive ban on the import of apples from countries like Turkey and Azerbaijan, highlighting the adverse and devastating impact on local apple growers, a vital and economically critical segment of Himachal’s agrarian economy. The crucial expansion of Kangra Airport, a key infrastructure project essential for bolstering tourism and regional connectivity, was also discussed, with Sukhu proposing a fair 50:50 cost-sharing arrangement with the Centre to expedite its completion.
The NITI Aayog meeting serves as an absolutely crucial platform for such high-stakes dialogues, embodying the very spirit of cooperative federalism that underpins India’s constitutional framework. As the premier policy ‘think tank’ of the Government of India, NITI Aayog meticulously facilitates strategic and technical advice to both the central and state governments, assiduously promoting better coordination and comprehensive policy formulation. These governing council meetings specifically allow state leaders to directly present their precise development agenda, urgent financial needs, and nuanced policy recommendations to the Union government, fostering a more collaborative and responsive approach to national development.
The comprehensive demands put forth by both Punjab and Himachal Pradesh reflect deeper structural and financial challenges that are, in varying degrees, faced by many states across India. Punjab’s call for increased vertical devolution of central taxes to 50% and the vital inclusion of cesses, surcharges, and select non-tax revenues in the divisible pool highlights a broader, ongoing contention regarding the principles of fiscal federalism in the country. Both states also voiced significant concerns about what they perceive as unilateral deductions in their borrowing limits under Article 293 of the Constitution, arguing that such actions impede their fiscal autonomy and planning.
While the immediate outcome of these specific demands remains to be seen, the very fact that they were articulated with such clarity and conviction at such a high-level national forum unequivocally underscores their paramount significance. Granting targeted special financial packages or strategically addressing these underlying structural issues could provide a much-needed impetus to development in these crucial states, helping them overcome specific and complex hurdles related to border security, pervasive agricultural distress, or unique geographical disadvantages.
Conversely, a prolonged lack of adequate central support could potentially exacerbate existing economic pressures and potentially hinder their progress towards achieving the ambitious national vision of ‘Viksit Bharat @2047’ (Developed India by 2047), a vision both Chief Ministers, despite their demands, unequivocally affirmed their commitment to. The NITI Aayog discussions, therefore, are not merely about financial figures or budgetary allocations; they are profoundly about shaping the socio-economic and developmental trajectory of key Indian states, directly influencing the lives and livelihoods of millions.