The North News
Shimla, February 9
The Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu has voiced concern over the discontinuation of the Revenue Deficit Grant (RDG), calling it a matter of the “rights of the people” rather than a political issue. Speaking on Sunday after a presentation by the state’s Finance Department on Himachal Pradesh’s financial position, Sukhu said the 16th Finance Commission’s recommendations would have a long-term impact on the state’s economy and its forthcoming budget.
Under Article 275 of the Constitution, the central government provides Revenue Deficit Grants to eligible states on the recommendation of the Finance Commission to bridge gaps in revenue. Sukhu said the removal of these grants would significantly affect Himachal Pradesh.
“We are ready to go to Delhi and meet Prime Minister Narendra Modi along with BJP MPs and MLAs to take up this issue,” he said. “Once the provision of RDG is gone, it will be difficult to reclaim the rights of the people.”
The chief minister said the grants for 17 states had been scrapped, but argued that Himachal Pradesh was the worst affected as 12.7% of its budget depended on the RDG — the second highest proportion in the country.
He also pointed to slower revenue growth in the post-Goods and Services Tax (GST) regime. According to Mr Sukhu, the state’s tax collection growth has fallen to around 8%, compared with 13–14% before GST was introduced.
Describing Himachal Pradesh as a “producer state”, he said the shift to GST — a consumer-based tax — had adversely affected the state’s economy, given its population of about 7.5 million. He added that the new tax regime had also reduced the state’s powers to impose certain taxes.
Sukhu said the state government would continue to press its case with the Centre, including seeking at least 50% royalty on power projects that have repaid their loans and the return of projects that have completed 40 years since commissioning.
He added that BJP legislators had been invited to attend the financial presentation but did not participate.
