Shimla, March 2 Chief Minister Sukhvinder Singh on Monday sought a financial package under special central assistance to cover the revenue deficit for the financial year 2026-27.
Sukhu, who met with Union Finance Minister Nirmala Sitharaman in New Delhi, informed her that discontinuing the Revenue Deficit Grant (RDG) would have a significant negative impact on the state's financial health. He added that Himachal Pradesh cannot be compared to other states whose RDG has been discontinued.
He said that the state's RDG contribution was approximately 12.7%, the second highest after Nagaland.
According to a statement issued here, the chief minister said that while larger states can withstand the discontinuation, the economy of Himachal Pradesh cannot. He added that assessing all states by a single standard is neither healthy nor transparent.
Terming the discontinuation of RDG as undermining the spirit of cooperative federalism, he said that Article 275(1) of the Constitution of India provides for such grants to states that cannot bridge the gap between their revenue receipts and expenditure.
He said this was the first time the Finance Commission has completely ignored the developmental needs of small hill states.
He also informed the Finance Minister that over the last two to three years, several measures were taken to reduce expenditure and about Rs 600 crore annually was raised through various cesses.
He said that the state suffered revenue losses due to the Goods and Services Tax (GST). He added that despite raising tax rates wherever feasible and rationalizing subsidies, the revenue deficit gap 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 sympathetic consideration for the state's demands, the statement added.
