Shimla: Chief Minister Thakur Sukhvinder Singh Sukhu called on Union Finance Minister Nirmala Sitharaman at New Delhi today and sought a financial package under special central assistance to cover the revenue deficit for Financial year 2026-27.
The Chief Minister apprised the Union Finance Minister that discontinuation of Revenue Deficit Grant ( RDG ) will have far reaching adverse impact on the financial health of the state and added that Himachal Pradesh cannot be compared to other states whose RDG has been discontinued. He said that RDG contribution for the state was about 12.7 percent which was second highest after Nagaland. He said that big states can withstand the discontinuation but the economy of Himachal Pradesh cannot. He added that assessing all states on a single yardstick was neither healthy nor transparent.
He termed the discontinuation as ‘undermining the spirit of cooperative federalism ‘. He said that the Article 275(1) of the Constitution of India provides for such grants to the state which cannot bridge the gap between their revenue receipts and expenditure. He said that this was for the first time that the Finance Commission has totally ignored the developmental needs of small hill states.
He also informed the Finance Minister that since last two-three years several measures were taken to reduce expenditure, no off-budget borrowing was resorted to and about Rs. 600 crore annually was raised through various cess. He said that state suffered revenue losses due to GST and added that despite raising tax rates wherever feasible and rationalizing subsidies, the gap in revenue deficit cannot be bridged.
Sukhu requested the Union Finance Minister to constitute a committee to properly assess the economies of hill states and recommend corrective measures.
Nirmala Sitharaman assured of sympathetic consideration for the demands of the state. Principal Advisor to Chief Minister Ram Subhag Singh and Principal Secretary Finance Devesh Kumar accompanied the Chief Minister.
