When it comes to the country’s economy, everyone is often weighed on the same scale, but Himachal Pradesh has now raised serious questions on this ‘single scale’. An important meeting took place in the national capital on Monday, where Chief Minister Sukhwinder Singh Sukhu bluntly expressed the financial concerns of the state to Union Finance Minister Nirmala Sitharaman.
The Chief Minister’s logic was clear: The economic structure of the Himalayan states is different from that of the plains, so the rules for them should also be different.
cross argument on revenue grant
The Chief Minister advocated continuation of ‘Revenue Deficit Grant’ (RDG) while demanding special financial assistance from the Center for the financial year 2026-27. He warned that if this help is stopped, the financial condition of the state may collapse.
Presenting the data, Sukhu said that the share of RDG in Himachal’s economy is about 12.7%, which is the highest in the country after Nagaland. Bigger states may have alternative resources, but for Himachal with its difficult geographical conditions, this grant is like a lifeline. Seeing all the states through the same prism is contrary to the basic principle of ‘Cooperative Federalism’.
Issue of ignoring the constitution and development
During the meeting, the Chief Minister cited Article 275(1) of the Constitution, which empowers states to make grants to bridge the gap between income and expenditure. He regretted that for the first time the Finance Commission has completely ignored the real needs of the small hill states and their developmental constraints.
Financial pressure despite discipline
The Chief Minister also made it clear that Himachal is not only pleading for help, but is also taking strict steps. He informed the Finance Minister that the state has not taken any off-budget loan.
Additional revenue of Rs 600 crore is being collected annually through various cesses. Despite taking tough decisions like cutting subsidies and improving tax rates, it is proving impossible to recover the losses caused by GST.
steps towards solution
The Chief Minister urged the Center to constitute a special committee to understand the unique economy of the hill states and suggest ways of improvement. In this high level meeting, along with the Chief Minister, his Chief Advisor Ram Subhag Singh and Principal Secretary (Finance) Devesh Kumar were also present. The Union Finance Minister listened to these demands carefully and assured to consider them sympathetically while adopting a positive attitude.