Chief Minister Sukhu urges continuation of revenue deficit grant for disaster-hit HP

Shimla: Having faced colossal damage to physical infrastructure and loss of precious lives, Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu on Thursday met chairman of the 16th Finance Commission Arvind Panagariya in New Delhi and asked for the continuation of the Revenue Deficit Grant (RDG) to sustain the states’ fiscal health.

The Chief Minister drew the attention of Panagariya to the natural calamities that the state has been facing for the last three years due to various factors, including climate change and global warming.

The state has suffered losses of more than Rs. 15,000 crores and a very high number of fatalities. Apart from damage to infrastructure—roads, bridges, water supply schemes, and health institutions—farmlands and fruit crops have also been hit badly.

The damage to the environment and infrastructure was colossal. He apprised that the Supreme Court also made an observation in July 2025 that revenue could not be earned at the cost of the environment and ecology, and it could prove detrimental for the entire state.

“Nevertheless, essential public services have to be provided as part of constitutional obligations, and with more than 67 percent of our area as forest land, there was very little space to maneuver,” he informed. Making a case for the continuation of the RDG, Sukhu said, for a revenue-deficient state like HP, this is an urgent requirement.

He requested not to taper RDG, which should be determined on the realistic assessment of the state’s revenues and expenditure projections during the award period by the 16th Finance Commission. He also advocated for maintaining the RDG at a minimum level of Rs 10,000 crore annually.

The CM reminded that a detailed justification for increasing the weightage for the criteria of forest and ecology has been submitted by the state to the Commission. Snow-covered-cum-cold desert areas, i.e., above the tree line, should be included along with very dense forest and moderately dense forest areas for their symbiotic relationship.

Meanwhile, HP demanded the creation of a separate ‘Green Fund’ with an earmarked annual allocation of Rs 50,000 crore for the hill states to compensate for the ecological services they provide in various forms. There is also a need to reframe the Disaster Risk Index developed by 15th Finance Commission, as the Himalayan region cannot be equated with rest of the country in terms of various hazard vulnerabilities and their respective weightages, the CM said.