HP CM Sukhu meets Sitharaman, seeks special aid to cover revenue gap

HP CM Sukhvinder Singh Sukhu met Union Finance Minister Nirmala Sitharaman to request a special financial package. He argued that discontinuing the Revenue Deficit Grant would severely impact the state's economy, unlike larger states.

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.

Concerns Over Revenue Deficit Grant

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.

'Undermining Cooperative Federalism'

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.

State's Efforts to Manage Finances

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)

(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)