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Himachal CM Seeks Special Central Aid, Warns of Financial Crisis

Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu met Union Finance Minister Nirmala Sitharaman in Delhi to request a special financial package. He argued that discontinuing the Revenue Deficit Grant would severely impact the state's financial health, as it constitutes about 12.7% of its finances. The CM stated that assessing all states by the same yardstick is unfair and referred to constitutional provisions for grants. Finance Minister Sitharaman assured sympathetic consideration of the state's demands.

Key Points: Himachal CM Meets FM, Seeks Special Assistance for 2026-27

  • CM seeks special central assistance for 2026-27
  • Warns of adverse impact from discontinued Revenue Deficit Grant
  • Cites constitutional provision for grants to states
  • Requests committee to assess hill state economies
2 min read

Himachal CM Sukhu meets Union Finance Minister, seeks special central assistance for 2026-27

Himachal CM Sukhu meets FM Nirmala Sitharaman, requesting special central aid to cover the state's revenue deficit for 2026-27.

"Big states can withstand the discontinuation, but the economy of Himachal Pradesh cannot. - CM Sukhvinder Singh Sukhu"

Shimla, March 2

Himachal Pradesh Chief Minister Thakur Sukhvinder Singh Sukhu called on Union Finance Minister Nirmala Sitharaman at New Delhi on Monday and sought a financial package under special central assistance to cover the revenue deficit for the financial year 2026-27.

According to the Himachal CMO, the CM 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 and added that Himachal Pradesh cannot be compared to other states whose RDG has been discontinued.

CM Sukhu said that RDG contribution for the state was about 12.7 percent which was the second highest after Nagaland.

"Big states can withstand the discontinuation, but the economy of Himachal Pradesh cannot. Assessing all states on a single yardstick is neither healthy nor transparent," CM Sukhu said.

He termed the discontinuation as "undermining the spirit of cooperative federalism" and referred to Article 275(1) of the Constitution, which provides grants to states unable to bridge the gap between revenue receipts and expenditure. He added that this was the first time a Finance Commission had completely ignored the developmental needs of small hill states.

The Chief Minister also briefed 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 cesses.

CM Sukhu added that the state suffered revenue losses due to GST and added that despite raising tax rates wherever feasible and rationalising 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 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.

- ANI

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Reader Comments

S
Sarah B
While I understand the need for assistance, the state government must also show more fiscal prudence. They mention raising cesses by ₹600 crore annually - that's a burden on common people. Where is the plan for boosting sustainable revenue sources like eco-tourism or horticulture?
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Priyanka N
Completely agree with CM Sukhu. Comparing HP to plains states is like comparing apples and oranges. Our infrastructure costs are higher, population is scattered, and we bear the ecological burden for the whole country. The grant is not a charity, it's our right under Article 275(1).
A
Aman W
The Finance Minister's assurance of "sympathetic consideration" is good, but we need concrete action. Himachal contributes so much to the nation's tourism and environmental health. Hope the committee is formed soon with actual experts who understand hill economies.
K
Karthik V
The point about GST causing revenue loss is crucial. Many small businesses in hill stations are struggling with compliance. Maybe a special GST slab or easier norms for mountain states could help boost their own revenue collection alongside central grants.
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Michael C
As someone who visits Himachal often, I see the development challenges firsthand. Roads, healthcare, and electricity in remote villages cost much more to provide. Cooperative federalism means recognizing these disparities. The Centre should honor the spirit of the Constitution.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

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