Ending Revenue Deficit Grant violates federal rights of states: Himachal CM Sukhu

Speaking to ANI, Sukhu said Himachal Pradesh has been receiving the Revenue Deficit Grant under Article 275(1) since 1952 and that discontinuing it ignores the structural realities of hill states.

"The cut and ending of the Revenue Deficit Grant is a direct violation of the constitutional rights of states in a federal structure. Small and mountainous states like Himachal Pradesh can never become revenue-surplus states. This is a globally accepted convention for mountain regions," Sukhu said.

The Chief Minister said the 16th Finance Commission report, tabled along with the Union Budget, has dealt a severe blow to the state's finances. He said Himachal was expecting nearly Rs 50,000 crore as RDG for the 2026-31 period, but the recommendations have gone against the interests of the state.

"During the first year, around Rs 11,431 crore was provided as interim RDG. We had clearly demanded that there should be no tapering and that the grant should continue in equal proportion, as was sought during the 15th Finance Commission as well," he said.

Sukhu said the state's borrowing capacity has also been constrained, as loan limits are decided on the basis of GSDP, while Himachal's taxation powers were severely impacted after the end of GST compensation.

Highlighting agrarian distress, the Chief Minister said free trade agreements with New Zealand and the European Union have badly affected apple growers and farmers in the state.

"Our apple and other farmers have suffered badly due to FTAs. At the same time, MGNREGA's demand-driven employment guarantee has weakened after changes like the G-RAM-G mechanism," he said.

Sukhu said Himachal Pradesh is already under financial stress, worsened by successive natural disasters.

"In 2023-24, we faced massive natural disasters. A central team assessed losses of around Rs 9,300 crore, but funds were released after nearly two years. In 2025, the Samej area of Shimla district was hit again. A central team visited, but no relief has been released so far. We are fighting legally for our rights," he said.

Emphasising Himachal's ecological contribution, Sukhu said the state provides environmental services worth 90,000 crore to the country.

"We are the lungs of North India. Five rivers originate from Himachal Pradesh. We protect forests, glaciers and rivers and help neighbouring states. We are the water bowl of northern India, yet we receive almost nothing in return--only 12 per cent royalty from private hydropower players," he said.

The Chief Minister said if RDG is ended, states like Himachal should be given greater rights over their natural resources and taxation powers.

"If Revenue Deficit Grant is stopped, then we must be given the right to impose taxes on our resources. This is the right of our farmers, orchardists and people. We have contributed our natural wealth to the nation and deserve justice," he said.

Sukhu also raised the issue of pending grants like BBMB and Shanan hydel project compensation, alleging that despite Supreme Court orders, Himachal has not received its due share.

On the Union Budget, the Chief Minister said he would not comment in detail immediately but announced that the state government would hold a cabinet meeting soon to deliberate on the issue.

"The interests of Himachal Pradesh are paramount. I appeal to the BJP state leadership and all MPs to rise above party lines and take up the state's case with the Union government," Sukhu said.

He also said he was ready to be part of a joint delegation, even if it is led by former Chief Minister and Leader of Opposition Jai Ram Thakur, to seek justice for Himachal Pradesh.

"I am ready to go with a BJP-led delegation to the Centre to protect the rights of Himachal Pradesh. This is not about politics; this is about the state's future," Sukhu added.

Criticising BJP leaders for remaining silent, Sukhu said merely thanking the Centre without understanding the impact of RDG cuts reflects a lack of seriousness towards Himachal's concerns.

"If leaders are unaware of the RDG cut and its consequences, it is unfortunate. Himachal Pradesh will fight for its rights through democratic and constitutional means," he said. (ANI)