Himachal CM Sukhu seeks special financial package from Centre

Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu on Monday (March 2, 2026) sought a special financial package from the Centre to cover the State’s revenue deficit for the financial year 2026-27.

During a meeting with Union Finance Minister Nirmala Sitharaman in New Delhi, Mr. Sukhu claimed that the discontinuation of the Revenue Deficit Grant (RDG) would have a far-reaching adverse impact on the State’s financial health.

“Himachal Pradesh cannot be compared with other States whose RDG has been discontinued. The RDG contribution for the State was approximately 12.7%, the second highest after Nagaland. Big States can withstand the discontinuation (of RDG), but the economy of Himachal Pradesh can’t,” he said, adding that assessing all States on a single yardstick was neither healthy nor transparent.

The Chief Minister said, “The move undermines the spirit of cooperative federalism”. He stated that Article 275(1) of the Constitution allows such grants to the State that cannot bridge the gap between their revenue receipts and expenditure. He added that this was the first time that the Finance Commission had ignored the developmental needs of small hill States.

Mr. Sukhu also requested the Union Finance Minister to constitute a committee to assess the economic challenges faced by hill States and recommend corrective measures.

In a statement, he said the State has taken several steps over the past two to three years to improve its fiscal position, including reducing expenditure, avoiding off-budget borrowings, and raising about ₹600 crore annually through various cesses. “However, the State suffered revenue losses due to (the implementation of) GST. Despite raising tax rates wherever feasible and rationalising subsidies, the gap in revenue deficit could not be bridged,” he added.