RDG was a temporary step: Anurag Thakur responds to Himachal CM Sukhvinder Sukhu’s allegations

Responding to Himachal Chief Minister Sukhvinder Singh Sukhu’s allegations that discontinuation of Revenue Deficit Grant (RDG) was injustice to Himachal, BJP MP Anurag Thakur said the RDG was a temporary instrument and the 16th Finance Commission did not recommend it as the persistent pattern of weak tax collection effort and high committed expenditure was noticed among the recipient states.

Thakur said Himachal’s share in tax devolution had increased from 0.83 per cent to 0.91 per cent. “Himachal’s post-devolution receipts under the new formula rose from the 2025-26 Budget estimates of around Rs 11,561 crore to Rs 13,949, an increase of approximately Rs 2,388 crore. The increase in central tax devolution contradicts the claims that the state has been penalised by the Finance Commission,” said Thakur.

Thakur added that the RDG mechanism under 15th Finance Commission was front-loaded to help states through the pandemic shock. It was explicitly framed as a time-bound, transitional measure intended to bring the states to near-zero revenue deficits by 2025-26.

“The 16th Finance Commission reviewed the outcomes and concluded that despite large RDG transfers, actual revenue deficits did not move towards the normative path because many states did not strengthen revenue mobilisation or rationalise spending,” he said.

Thakur said the real challenge in front of the state was how to restore fiscal discipline, improve tax collection effort and invest in our future. “That is the path to lasting prosperity for Himachal,” he said.