Shimla: After having got a resolution adopted at the state Assembly on the Revenue Deficit Grant (RDG), Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu on Monday met Union Finance minister Nirmala Sitharaman at New Delhi and sought her intervention in granting a bailout package to the state.
The Central government’s decision to scrap the RDG, based on recommendations from the 16th Finance Commission, has severely impacted Himachal Pradesh’s fiscal health.
The withdrawal of the RDG has resulted in an annual loss of Rs 6,000 crore.
The state’s debt burden already exceeds Rs 110 crore, and the state’s power to raise loans is capped at Rs 10,000 crore. The hill state is in a tight situation, with little hope of reviving its fiscal health without Grant-in-Aid from the centre.
During the meeting with the minister, Sukhu apprised the Finance minister that discontinuation of the Revenue Deficit Grant ( RDG ) will have a far-reaching adverse impact on the financial health of the state.
He took pains to explain that Himachal Pradesh cannot be compared with other states, whose RDG has been discontinued.
Sukhu told the minister that RDG’s contribution to the state was about 12.7 per cent, which was the second highest after Nagaland. The big states can withstand the discontinuation, but the economy of Himachal Pradesh cannot.
He underlined that assessing all states on a single yardstick was neither healthy nor transparent.