Shimla: Terming the Union Budget a betrayal for the hill state, Himachal Chief Minister Sukhinder Singh Sukhu said it was the first time since 1952 that the Centre has chosen to shut the doors on the state to provide Revenue Deficit Grants (RDG)—a blow of Rs 50,000 crore to the state.
Expressing disappointment, Sukhu urged the Union Finance minister to review the move to stop RDG for the resource-constrained hill state.
The Chief Minister accused the Centre of overlooking the concerns and development priorities of Himachal Pradesh, describing the Budget as “anti-poor and anti-farmer” and insensitive to the needs of vulnerable sections. He said the Sixteenth Finance Commission had failed to provide meaningful RDGs despite repeated representations, detailed memoranda and technical submissions made by the state government.
Sukhu pointed out that Article 275(1) of the Constitution provides for state-specific grants, commonly referred to as Revenue Deficit Grants, to address structural fiscal imbalances. He noted that from 1952 up to the Fifteenth Finance Commission, such grants had been consistently extended to states. However, the Sixteenth Finance Commission has, for the first time, discontinued RDGs for small states, including Himachal Pradesh, a move he termed unjust and deeply disappointing.
Under the Fifteenth Finance Commission, Himachal Pradesh had received approximately Rs 37,000 crore as revenue deficit grants, he said. He also recalled that after the Fourteenth Finance Commission, interim assistance of Rs 11,431 crore was provided during a delay in finalising the Fifteenth Commission’s report.
The Chief Minister said the decision ignored the state’s structural disadvantages, including over 67 per cent forest and ecological cover, higher per-capita costs of service delivery in mountainous terrain, and repeated natural disasters that have caused losses exceeding Rs 15,000 crore in recent years.