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Himachal CM Seeks Financial Package from FM to Cover Revenue Deficit

Himachal Pradesh Chief Minister Sukhvinder Sukhu met Union Finance Minister Nirmala Sitharaman in New Delhi to request a financial package. He argued that discontinuing the Revenue Deficit Grant would severely impact the state's finances, as it constitutes a significant portion of its revenue. The CM stated that assessing all states by the same standard is unfair, especially for small hill states like Himachal. He requested the formation of a committee to properly evaluate the economies of hill states and recommend corrective measures.

Key Points: Himachal CM Seeks Central Aid for Revenue Deficit from FM

  • CM seeks special central assistance
  • Warns of adverse financial impact
  • Says discontinuation of grant unfair to hill states
  • Requests committee to assess hill state economies
2 min read

Himachal CM calls on FM Sitharaman, seeks package to cover revenue deficit

Himachal CM Sukhvinder Sukhu meets FM Nirmala Sitharaman, seeks special financial package to cover state's revenue deficit for 2026-27.

Himachal CM calls on FM Sitharaman, seeks package to cover revenue deficit
"undermining the spirit of cooperative federalism - Sukhvinder Sukhu"

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.

- IANS

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Reader Comments

S
Sarah B
While I understand the state's need, there has to be fiscal responsibility from all sides. The article mentions they raised ₹600 crore through cesses. Are we sure the state government has done everything to streamline its own expenditure before asking for more central funds? Just a thought.
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Priya S
As someone from Shimla, I see the ground reality. Our state provides ecological services to the entire north India. We preserve forests and rivers. Shouldn't there be a green bonus or compensation for that? The revenue deficit grant is crucial for basic development here. Hope FM Sitharaman listens.
R
Rohit P
The GST point is key! Many small businesses and hoteliers here still struggle with the new system, and it has hit revenue. The Finance Commission should have a separate formula for special category states. One-size-fits-all doesn't work for a diverse country like India.
M
Michael C
Forming a committee to assess hill state economies is a sensible request. Data-driven policy is better than arbitrary cuts. Hope the committee, if formed, includes local economists and doesn't just become another bureaucratic delay tactic.
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Nisha Z
"Sympathetic consideration" – we hear this phrase so often from the Centre. What states need is concrete action and timely release of funds. Himachal is a beautiful state that contributes so much to national tourism. It deserves solid support, not just sympathy. 🏔️

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