New Delhi, March 2 Himachal Pradesh Chief Minister Sukhvinder Sukhu on Monday called on Union Finance Minister Nirmala Sitharaman here and sought a financial package under special central assistance to cover the revenue deficit for 2026-27.
The Chief Minister apprised the Union Finance Minister that discontinuation of Revenue Deficit Grant (RDG) will have a far-reaching adverse impact on the financial health of the state, adding that Himachal Pradesh cannot be compared to other states whose RDG has been discontinued.
He said the RDG contribution for the state was about 12.7 per cent, which was the second-highest after Nagaland. Big states can withstand the discontinuation, but the economy of Himachal Pradesh cannot, he said.
Stressing that assessing all states on a single yardstick was neither healthy nor transparent, Sukhu termed the discontinuation as "undermining the spirit of cooperative federalism".
He said that Article 275 (1) of the Constitution provides for such grants to the state which cannot bridge the gap between their revenue receipts and expenditure, and this was the first time that the Finance Commission has totally ignored the developmental needs of small hill states.
He also informed the Union Finance Minister that, over the past 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 cesses.
The Himachal CM said that the state suffered revenue losses due to Goods and Services Tax (GST) and added that despite raising tax rates wherever feasible and rationalising subsidies, the gap in revenue deficit cannot be bridged.
CM Sukhu requested the Union Finance Minister to constitute a committee to properly assess the economies of hill states and recommend corrective measures, and she assured sympathetic consideration for the demands of the state.
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