RDG discontinuation fallout: Himachal presents ‘reduced’ budget

Asserting that discontinuation of central government’s Revenue Deficit Grant would result in average loss of ₹8,105 crore annually, Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu on Saturday (March 21, 2026) presented a ‘reduced’ State budget with an outlay of ₹54,928 crore for the year 2026-27, against ₹58,514 crore of 2025-26.

Mr. Sukhu, who holds the finance portfolio, presented the State budget during the ongoing budget session of the State Assembly in Shimla, noted that from the year 2020-21 to the year 2025-26 Himachal has received ₹48,630 crore rupees as RDG. “Now the Central government has accepted the recommendations of the 16th Finance Commission. This means that according to the standards of the previous Finance Commission, we will suffer an average loss of ₹8,105 crore rupees per year. According to the principle of Inflation and Time Value of Money, this Grant should have been increased in the coming years to at least ₹10,000 crore rupees per year, but it has been stopped. The result of this is that we are being forced to reduce the total size of the budget. In the year 2025-26 the size of our budget was ₹58,514 crore, which will be ₹54,928 crore rupees for the year 2026-27.”

Also read: Himachal Pradesh’s growth in 2025-26 pegged at 8.3%, says economic survey

Pointing out the global situation, Mr. Sukhu said “In this scene of devastation, thousands of women, children, and school girls in Ukraine, Gaza, and Iran are being burnt to ashes. In this era of war frenzy, sensitivity, tolerance, morality, and dignity are being continuously violated. Life values have now been transformed into short term deals and humanity has been set aside. A few years ago, we could not even imagine such a dance of absolute power.” “If these conflicts and wars do not end soon, the prices of petrol, diesel, and gas will start touching the sky and we will enter such a period of inflation where it will become very difficult for all of us, especially poor families, to survive.”

Noting the State is currently going through a serious financial situation, Mr. Sukhu said this situation has not arisen suddenly, but is the result of weak financial management and wrong priorities of the previous government and along with this, the stopping of RDG has created additional pressure on the State. “In such circumstances, to overcome this challenge, all of us will have to contribute together. With this spirit, the Government has decided that 50% of the Chief Minister’s salary, 30% of the Deputy Chief Minister and Members of Council of Ministers’ salary, and 20% of the MLAs’ salary will be temporarily deferred for the next six months. In addition, 20% of the salary of all Chairman, Vice-Chairman, Deputy Chairman and all Advisors (political appointees) will also be temporarily deferred for the same period,” he said.

“At the level of senior administrative, police, and forest officers, equal contribution will also be ensured. Under this, 30% of the salary of the Chief Secretary, Additional Chief Secretaries, and all Principal Secretaries, and 20% of the salary of Secretaries and all Heads of Departments will be temporarily deferred,” said the Chief Minister, as he detailed deferments of other other ranks as well.