New Delhi: Raising concerns over mounting financial pressures on mountain states, Chief Minister Sukhvinder Singh Sukhu on Thursday urged the Centre to constitute a high-level committee for hill states to assess losses arising from the discontinuation of the Revenue Deficit Grant (RDG), recurring natural disasters, inadequate free power benefits from hydropower projects and revenue losses under the GST regime.
Sukhu made the demand while participating in the 11th Governing Council meeting of NITI Aayog in New Delhi, chaired by Prime Minister Narendra Modi. The meeting focused on strategies to ensure inclusive growth and translate the vision of Viksit Bharat into measurable outcomes.
Addressing the meeting, the Chief Minister said hill states have unique geographical and developmental challenges and require a separate mechanism to assess their financial needs. He said a detailed report prepared by a high-level committee would help ensure that these states receive their due share from the Government of India.
He said the discontinuation of the Revenue Deficit Grant had dealt a major blow to the economy of Himachal Pradesh. The state had relied heavily on the grant, which was provided on the recommendations of the Finance Commission to bridge the gap between revenue receipts and expenditure. Owing to its difficult terrain, sparse population and higher cost of delivering public services, Himachal Pradesh has traditionally depended on such central support.
According to the state government, the phasing out of RDG has reduced fiscal space and increased pressure on state finances. The Chief Minister said the ₹25,000-crore package announced for hill states at the request of their Chief Ministers was insufficient to compensate for the losses. He demanded that the amount be increased to ₹50,000 crore to ensure smooth implementation of development works.
Sukhu said Himachal Pradesh continues to contribute to the country’s growth despite financial constraints and termed the state the “green frontier” of the nation. Citing a study conducted by the Indian Institute of Forest Management, he said Himachal provides ecological services worth around ₹90,000 crore annually to the country but is not compensated adequately for preserving forests and maintaining ecological balance.
He also raised the issue of hydropower benefits, saying Himachal Pradesh was not receiving a fair amount of free power from nearly 13,000 MW of electricity being generated in the state. In addition, he said arrears of about ₹7,000 crore from the Bhakra Beas Management Board (BBMB) are yet to be released.
Referring to the losses caused by natural calamities, the Chief Minister said the state was still awaiting the ₹1,500 crore special assistance announced by the Centre. He further pointed out that Himachal Pradesh had suffered revenue losses of around ₹25,000 crore during the past eight years due to the present GST regime.
Calling for special attention to mountain states, Sukhu said stronger financial support from the Centre was essential to sustain development activities and enable hill states to continue contributing to the country’s ecological security and economic growth.
