Shimla: Just a day after Chief Minister Sukhvinder Singh Sukhu escalated his attack on the Centre over the stoppage of the Revenue Deficit Grant (RDG), former Union minister and Hamirpur MP Anurag Thakur joined the issue with him, strongly countering the charge.
He termed the Chief Minister’s claims as misleading and politically motivated.
Thakur said the state’s interests stand fully protected, and it was strange that Sukhu has chosen to give a political twist to the issue, diverting public attention from the failures of his own government and raising debt due to endless borrowings.
He said Himachal Pradesh’s share of the divisible pool increased from 0.83 per cent under the 15th Finance Commission to 0.914 per cent under the 16th Finance Commission.
This has helped the state to get an additional Rs 2,388 crores.
Moreover, the 15th Finance Commission has already forewarned the states about stopping the Revenue Deficit Grant after its term. By then, the states were asked to prepare themselves for this.
Releasing the details and break-ups, he said the RDGs under the 15th Finance Commission were temporary, front-loaded grants to help states through the Covid-19 shock.
The states were encouraged to achieve near-zero revenue deficits by the 2025-26 fiscal year.
“The 16th Finance Commission discontinued routine RDGs because persistent weak tax effort and high committed expenditures in some states, including Himachal Pradesh, prevented structural fiscal improvement,” he said.
Thakur also spoke about Himachal’s weak fiscal record, including low tax effort, which was just 5.6 per cent of gross state domestic product (GSDP) in 2023-24.
There is very high revenue expenditure, which is 21 per cent of GSDP and a burgeoning debt burden of 42.8 per cent of GSDP in 2023-24.
He drew a parallel with other states, including opposition-ruled ones, which also benefited from the 16th Finance Commission formula, showing that allocations were based on objective criteria, not partisanship.
He said Karnataka, the congress ruled state, has got maximum funding under the 16th Finance Commission. “ Where is the question of discrimination ?” he asked.
Thakur suggested that the state machinery should rather focus on strengthening fiscal discipline, improving tax mobilisation, and investing in the state’s future, emphasising that increased devolution under the 16th Finance Commission provides a strong opportunity for Himachal Pradesh’s growth.
Anurag Thakur thanked Prime Minister Narendra Modi and Union Finance minister Nirmala Sitharaman for granting Rs 2,911 cr to Himachal Pradesh, a hike of 27 per cent from what was given in 2009-14 by the Congress-led government for railway projects.