CM Sukhu talks of meeting PM on RDG crisis, offers to collaborate with LoP, MPs

Shimla: Sharing his deep concern over the Centre withdrawing the Revenue Deficit Grant (RDG), Chief Minister Sukhvinder Singh Sukhu said he was pinning hopes on Prime Minister Narendra Modi and would meet him soon, acknowledging that only the Prime Minister has the authority to do justice to a small hill state.

After a detailed presentation made by the state’s finance department on the impact of the Centre’s move, Sukhu said he has offered the Leader of the Opposition and BJP MPs from the state to collectively raise the matter with the Prime Minister. He said the state’s worsening fiscal position was a direct fallout of the abolition of the RDG, which has severely constrained the government’s ability to meet committed expenditures and sustain development works

“Abolition of RDG is not the issue of a government, but it is a matter of the rights of the people of the state. We are ready to go to Delhi and meet the Prime Minister along with BJP MPs and MLAs to take up this issue. I think once the provision of RDG is gone, it will be difficult to reclaim the rights of the people,” he remarked.

He said taking legal recourse on the issue will be the last option, but he was prepared for a serious battle and ensured that the state survives financially.

“The governments come and go. Chief Ministers also change, but it’s the state that has to stand up to every challenge. I assure the people that the welfare measures undertaken and mandatory services are maintained,” he announced as MLAs and media persons were also invited to the presentation.

After the presentation, Chief Minister Sukhvinder Singh Sukhu said that the report of the 16th Finance Commission would have a long-term impact on the economy of the state, including the upcoming Budget. There is going to be a huge shortfall of Rs 6,000 to 8,000 crore.

“We had invited the BJP MLAs to attend this presentation, but unfortunately, they have not come. The RDG for 17 states has been scrapped, but Himachal Pradesh is the worst affected, as 12.7 per cent of the budget comes from RDG, which is the second highest in the country,” said the Chief Minister.

Elaborating on the crisis, he said the tax collection growth has come down to around 8 per cent, which was 13 to 14 per cent before the implementation of GST. Being a producer state, the GST withdrawal has adversely impacted the economy of the state, as it is a consumer-based tax. The competency of imposing taxes has also been taken away after the GST regime. This has put the state into major disarray.

Sukhu said RDG was a mechanism introduced in 1952 to help the states that were not financially viable and had no resource base. During all the past 73 years, the state has received RDG to sustain the growth and also help in meeting its committed liabilities.

He said that presently, the state’s own revenues are about 18,000 crore and its committed expenditure is around Rs 48,000 crore, which will go in salaries, pensions, loan interest and principal repayment, subsidies, social security pensions, etc.

Finance Secretary Devash Kumar, who made the presentation, said there will be a resource gap of about Rs. 6,000 crore, excluding developmental works. Pending liabilities will make it impossible for the state to freeze DA and cut down social security pensions and subsidies and privatise some of the PSUs and monetise government assets.