Himachal Pradesh Chief Minister Sukhvinder Sukhu met with Union Finance Minister Nirmala Sitharaman to request a financial package for the state to cover the revenue deficit for 2026-27. Sukhu highlighted that the discontinuation of the Revenue Deficit Grant would significantly impact the state’s financial well-being, emphasizing that Himachal Pradesh’s situation differs from states where the grant has been stopped. He pointed out that the state’s RDG contribution was the second-highest at 12.7%, following Nagaland, and expressed concerns about the state’s economic ability to cope with the grant’s discontinuation.
Stressing the need for a more tailored approach rather than a uniform standard for all states, Sukhu criticized the discontinuation as undermining the principles of cooperative federalism. He referenced Article 275(1) of the Constitution, which allows for grants to states facing revenue shortfalls, and criticized the Finance Commission for neglecting the developmental requirements of small hill states. Sukhu also informed the Finance Minister about the state’s efforts to cut costs, avoid off-budget borrowing, and generate around Rs 600 crore annually through various cesses.
The Chief Minister highlighted that Himachal Pradesh had suffered revenue losses due to the implementation of the Goods and Services Tax (GST), despite attempts to increase tax rates and streamline subsidies. He emphasized that the revenue deficit gap remained unbridgeable. Sukhu urged the Finance Minister to establish a committee to evaluate the economies of hill states accurately and propose corrective actions. Sitharaman assured Sukhu of considering the state’s requests sympathetically.
