Himachal Pradesh CM Sukhvinder Singh Sukhu seeks special central assistance for 2026-27

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

The CM told Sitharaman that discontinuation of the Revenue Deficit Grant (RDG) will have an adverse impact on the financial health of Himachal, and the state cannot be compared to other states whose grants have been discontinued.

Sukhu said RDG contribution for Himachal was about 12.7 per cent, second highest after Nagaland.

He also said that the economy of Himachal would not be able to sustain the discontinuation and stressed that assessing all states on a single yardstick was neither healthy nor transparent.

He termed the discontinuation as ‘undermining the spirit of cooperative federalism’, since Article 275(1) of the Constitution of India provides for such grants to states that find it difficult to bridge the gap between their revenue receipts and expenditure.

The CM said it is the first time when the Finance Commission has ignored the developmental needs of small-hill states.

He apprised Nirmala Sitharaman that over the past two to three years, the state had undertaken multiple steps to curtail expenditure, refrained from off-budget borrowings, and mobilised nearly Rs 600 crore annually through various cess levies.

He further stated that the state incurred significant revenue losses following the implementation of the GST. Despite enhancing tax rates wherever viable and rationalising subsidies, the widening revenue deficit persists and remains difficult to offset.

He urged the Union Finance Minister to set up a dedicated committee to comprehensively evaluate the fiscal challenges of hill states and propose suitable remedial measures.

Sitharaman assured him that the state’s demands would receive sympathetic consideration.