Shimla – Chief Minister Thakur Sukhvinder Singh Sukhu ( CM Sukhu ) stated that the discontinuation of the Revenue Deficit Grant (RDG) is not a matter concerning any single government but an issue directly linked to the rights of the people of the state. He said this while responding after a detailed presentation on the state’s financial position and the impact of the proposed termination of RDG.
The presentation was made by the Finance Department in the presence of the Chief Minister, Deputy Chief Minister Mukesh Agnihotri, Himachal Pradesh Vidhan Sabha Speaker Kuldeep Singh Pathania, ministers, MLAs, senior administrative officers, department heads, and members of the media. The Chief Minister noted that the recommendations of the 16th Finance Commission would have long-term implications on the state’s economy and future budgets.
CM Sukhu said that the state government is prepared to approach the Prime Minister along with BJP MPs and MLAs to safeguard the interests of Himachal Pradesh. He emphasized that once the provision of RDG is withdrawn, protecting the financial rights of the state’s people would become extremely difficult. He also expressed disappointment over the absence of BJP legislators from the presentation, stating that they should have attended to better understand the gravity of the financial situation.
Highlighting the impact, the Chief Minister said that RDG has been discontinued for 17 states, but Himachal Pradesh has been affected the most, as RDG contributes nearly 12.7 percent of the state’s total budget, making it the second-highest beneficiary in the country. He added that after the implementation of GST, the state’s tax collection rate dropped to nearly 8 percent from the earlier 13–14 percent. Since Himachal Pradesh is a producing state and GST is consumption-based, the state’s economy has suffered significantly.
The Chief Minister said that all stakeholders must unite to fight for the state’s rights. He demanded that hydropower projects which have repaid their loans should provide at least 50 percent royalty to the state and that projects completing 40 years of operation should be handed back to Himachal Pradesh. He also pointed out that ₹4,500 crore in pending dues from the Bhakra Beas Management Board have not been received since 2012 despite a Supreme Court ruling. Additionally, he said the state is pursuing a legal battle to reclaim the Shanan Power Project after the expiry of its lease.
CM Sukhu reiterated that the government is committed to making Himachal Pradesh self-reliant and has already generated ₹26,683 crore through its own resources, though this remains insufficient due to limited revenue sources such as rivers, forests, and tourism. He assured citizens that welfare schemes would continue without burdening the common people and that the struggle to enhance resources and protect state rights would persist.
He further stated that the state successfully raised the issue of forest cover before the 16th Finance Commission, which was accepted, and secured approval for disaster funding related to landslides, which were earlier excluded from disaster categories.
Industry Minister Harshwardhan Chauhan said that the cabinet had already deliberated on the implications of the 16th Finance Commission report and that the Finance Department had only presented suggestions, with final decisions resting with the cabinet.
The Finance Department emphasized that RDG has been crucial for balancing the gap between revenue and expenditure. Officials explained that the withdrawal of RDG has created a serious resource crisis, affecting development works and state योजनाओं. They warned that the impact of these recommendations would not be limited to the current government but would adversely affect future governments as well, resulting in grave injustice to the people of Himachal Pradesh.
