Shimla | March 2, 2026
Himachal Pradesh Chief Minister Thakur Sukhvinder Singh Sukhu has once again pitched for special central assistance for hill states, flagging serious fiscal stress after the discontinuation of the Revenue Deficit Grant (RDG).
Calling on Union Finance Minister Nirmala Sitharaman in New Delhi, the Chief Minister sought a financial package under special central assistance to bridge the revenue deficit for the financial year 2026–27.
Sukhu told the Finance Minister that applying a single yardstick to all states is unfair, especially for small hill states like Himachal Pradesh.
He said the withdrawal of RDG would have far-reaching consequences for the state’s finances, noting that RDG accounted for around 12.7 per cent of Himachal’s revenues, the second highest in the country after Nagaland. “Big states may absorb the shock, but Himachal simply cannot,” he argued.
Terming the decision as “undermining the spirit of cooperative federalism,” the Chief Minister pointed out that Article 275(1) of the Constitution explicitly provides for grants to states unable to bridge gaps between revenue receipts and expenditure.
He said this was the first time the Finance Commission had completely ignored the developmental needs of small hill states.
Sukhu also underlined that the state had taken tough measures over the past two to three years to rein in spending.
“There has been no off-budget borrowing, around ₹600 crore is being raised annually through various cesses, and taxes have been increased wherever feasible,” he said.
Despite rationalising subsidies, he added, revenue losses due to GST and structural constraints made it impossible to fully bridge the deficit.
The Chief Minister urged the Union government to set up a dedicated committee to assess the unique economies of hill states and recommend corrective measures instead of a one-size-fits-all approach.
Union Finance Minister Sitharaman assured him of sympathetic consideration of Himachal Pradesh’s demands.
Principal Advisor to the Chief Minister Ram Subhag Singh and Principal Secretary (Finance) Devesh Kumar were also present during the meeting.
