Chandigarh/New Delhi, Jan 11: Finance Minister Harpal Singh Cheema has urged the Union Government to provide a massive financial cushion to Punjab, arguing that the state is currently the “first line of defence” battling both economic and environmental crises.
Submitting a memorandum ahead of the 2026 Union Budget, Cheema stated that Punjab loses nearly ₹6,000 crore annually—roughly 44% of its tax revenue—due to structural issues in the current GST framework. He also pointed to the ₹12,905 crore in damages caused by severe flooding, which the Home Ministry has officially classified as a severe calamity.
“Punjab needs fiscal flexibility to rebuild after an extraordinary year,” Cheema told the Centre, while seeking permission for additional borrowing under the FRBM Act.
The state’s demands include a ₹1,000 crore grant for emergency response and anti-drug measures, along with the restoration of National Health Mission funds that were slashed by nearly 45%. Cheema further requested a stabilization mechanism for GST revenues to protect state finances from future shocks, calling for the move to be viewed as a gesture of true “cooperative federalism.”
