New Delhi: With the withdrawal of the Revenue Deficit Grant expected to leave Himachal Pradesh with an annual financial gap of around Rs. 8,000 crore, Chief Minister Sukhvinder Singh Sukhu sought a financial package from the Centre, including an increase in the borrowing limit from 3 to 4 percent of GSDP and enhanced assistance under key central schemes.
CM Sukhu, in a meeting with Union Finance and Corporate Affairs Minister Nirmala Sitharaman in New Delhi, apprised her of the state’s current financial position and the challenges arising from its difficult geographical and economic conditions.
The Chief Minister said the Revenue Deficit Grant (RDG) would be discontinued from the financial year 2026-27 following the recommendations of the 16th Finance Commission. He said the continuous reduction in the grant over the past few years had already placed considerable pressure on the state’s finances, while its discontinuation would further widen the annual financial gap.
Highlighting Himachal Pradesh’s unique circumstances, Sukhu said the state’s mountainous terrain, vulnerability to natural disasters and high cost of creating and maintaining infrastructure make the delivery of public services more expensive. He said the state had also suffered substantial losses due to natural disasters in recent years, making additional financial support from the Union Government essential.
Sukhu urged the Union Government to increase Himachal Pradesh’s borrowing limit from the existing 3 percent to 4 percent of GSDP. He said the additional fiscal space would enable the state to meet its committed liabilities and mobilise resources for essential public services and developmental priorities.
He also sought exemption of supply and vendor payments under the Special Assistance to States for Capital Investment (SASCI) scheme from the SNA-SPARSH model.
The Chief Minister further requested enhancement of allocations under Externally Aided Projects (EAPs) and sought consideration for doubling assistance under this component. He said increased assistance was necessary in view of the state’s difficult terrain, higher infrastructure costs and developmental requirements.
The Chief Minister urged the Union Government to assess Himachal Pradesh’s financial requirements in the context of its distinctive geographical and economic circumstances and sought generous financial assistance and necessary approvals in the larger interest of the state.
Union Finance Minister Nirmala Sitharaman assured Sukhu that the demands raised by the Himachal Pradesh Government would be considered sympathetically, keeping in view the state’s financial requirements and developmental priorities.
Acknowledging the financial challenges faced by Himachal Pradesh, she assured that the Union Government would extend necessary support to meet the state’s legitimate financial requirements.
She also assured that additional financial assistance under Special Central Assistance for Himachal Pradesh would be considered to help the state meet its developmental requirements and strengthen its financial position.
