New Delhi, March 2 (IANS). Himachal Pradesh Chief Minister Sukhwinder Singh Sukhu met Union Finance Minister Nirmala Sitharaman here on Monday and demanded a financial package under special central assistance to cover the probable revenue deficit of the year 2026-27.
During this, the Chief Minister discussed in detail the financial situation of the state and the specific challenges of the hill states.
The Chief Minister apprised the Finance Minister that the closure of Revenue Deficit Grant (RDG) would have far-reaching and adverse impact on the economy of Himachal Pradesh.
He said that Himachal Pradesh cannot be compared with other states where RDGs have been abolished, as the geographical and economic conditions of the state are different.
CM Sukhu informed that the contribution of RDG to the total revenue of the state is about 12.7 percent, which is the second highest after Nagaland.
He argued that large and resource-rich states can absorb the impact of the scheme’s closure, but for a small hill state it could pose a serious challenge.
The Chief Minister said that evaluating all the states on the same criteria is neither a healthy tradition nor a part of a transparent system. He described the process of shutting down RDG as “a step to weaken the spirit of cooperative federalism”.
He also said that under Article 275(1) of the Constitution, there is a provision to give such grants to the states, which are helpful in bridging the gap between their revenue receipts and expenditure.
According to the Chief Minister, this is the first time that the Finance Commission has not given adequate importance to the developmental needs of small hill states.
Sukhwinder Singh Sukhu told the Union Finance Minister that the state government has taken several steps to control expenditure in the last two-three years. He said no extra-budget borrowing was resorted to and an additional Rs 600 crore was raised annually through various cesses. Despite this, financial pressure remains.
The Chief Minister also underlined that the state has suffered a loss in revenue after the implementation of the Goods and Services Tax (GST) system.
He said that wherever possible, tax rates were increased and efforts were made to rationalize subsidies, but despite this it was not possible to completely compensate for the revenue deficit.
During the meeting, Chief Minister Sukhu requested to constitute an expert committee to make an objective and comprehensive assessment of the economies of the hill states and suggest corrective measures keeping in mind their specific geographical conditions, limited resources and developmental needs.
He said that the Union Finance Minister has assured to consider the demands of the state sympathetically.
–IANS
ASH/DSC
