Centre Allocates Rs 25,000 Crore to Nine Himalayan States Under 'Pride of Hills' Scheme

The Central government has earmarked Rs 25,000 crore for nine Himalayan states under a new component of the Special Assistance to States for Capital Investment (SASCI) scheme, aimed at addressing the unique fiscal and developmental challenges faced by hill regions across India.

The component, named Pride of Hills, forms part of the SASCI framework for the financial year 2026-27 and is designed to boost capital investment in states that face structural constraints due to difficult terrain, low population density, limited connectivity, and a narrow revenue base.

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Arunachal Pradesh has received the highest allocation under the scheme at Rs 4,900 crore. The remaining allocations are as follows: Himachal Pradesh (Rs 3,920 crore), Nagaland (Rs 3,880 crore), Uttarakhand (Rs 3,460 crore), Tripura (Rs 3,450 crore), Manipur (Rs 2,400 crore), Meghalaya (Rs 2,070 crore), Sikkim (Rs 820 crore), and Mizoram (Rs 100 crore).

Officials noted that hill states typically show weaker fiscal indicators compared to plains states — including higher debt-to-GSDP ratios, a smaller own-tax revenue base, and greater dependence on central transfers to fund expenditure.

The Pride of Hills component is intended to address these structural constraints by encouraging capital expenditure and helping states meet committed liabilities, while investing in infrastructure and other revenue-generating assets that support long-term economic growth.

The additional allocation is expected to be channelled into key sectors including infrastructure development, connectivity projects, public services, and other assets that can contribute to sustainable economic development in geographically challenging areas.

Officials said the funding will help hill states strengthen their fiscal position without compromising on development spending — a balance that has historically been difficult to maintain given their limited revenue-generating capacity.