Himachal Pradesh’s fragile fiscal health and disaster vulnerabilities were highlighted during a meeting with the 16th Finance Commission in New Delhi on Thursday. Chief Minister Sukhvinder Singh Sukhu met Commission Chairman Dr. Arvind Panagariya and sought special consideration for the Himalayan state in the panel’s final recommendations.
The Chief Minister said Himachal has suffered damages worth more than Rs 15,000 crore in the last three years due to repeated natural disasters, apart from the loss of precious lives and large-scale destruction of infrastructure. He recalled that the Supreme Court, in its July 2025 observation, had also stressed that revenue cannot be earned at the cost of the environment and ecology, warning that such an approach could prove detrimental for the state.
Sukhu emphasised that with over 67 percent of its area under forest cover, Himachal has little scope to expand revenue generation while remaining constitutionally bound to provide essential public services. He urged the Commission to continue the Revenue Deficit Grant (RDG) for Himachal, seeking at least Rs 10,000 crore annually without tapering, based on realistic revenue and expenditure assessments.
He also demanded increased weightage for forest and ecology criteria, suggesting that snow-covered and cold desert areas above the tree line be included along with dense and moderately dense forests due to their ecological significance.
The Chief Minister pressed for the creation of a dedicated “Green Fund” with an annual allocation of Rs 50,000 crore for hill states, recognising the ecological services they provide. He stated that the matter had been previously raised with the Prime Minister and reinforced through a formal letter.
On disaster management, Sukhu argued that the Disaster Risk Index (DRI) prepared by the 15th Finance Commission was inadequate for Himalayan states as it ignored hazards such as landslides, snow avalanches, cloudbursts, forest fires, and Glacial Lake Outburst Floods (GLOFs). He said Himachal did not receive adequate resources in the last Finance Commission cycle due to its low DRI, despite facing disproportionately high disaster risks.
He requested that a separate DRI be prepared for hill states with relevant indicators, along with distinct allocations that could be distributed horizontally among such states on the basis of the revised index.
Sukhu concluded by urging the 16th Finance Commission to consider Himachal’s submissions sympathetically while finalising its report, so that the state’s finances remain sustainable. He assured that his government would continue to move on the path of fiscal prudence while safeguarding its ecology.
