Himachal CM Sukhu calls the Chairman of 16th Finance Commission, urges for continuation of revenue deficit grant

Shimla (Himachal Pradesh) [India], September 11 (ANI): Himachal Pradesh Chief Minister Thakur Sukhvinder Singh Sukhu met Chairman of the 16th Finance Commission Arvind Panagariya at New Delhi on Thursday and discussed the various issues related to the state's fiscal health.
According to the CMO release, CM Sukhu stated that Himachal Pradesh had been facing the brunt of natural disasters for the last three years, resulting in the loss of precious lives and a loss of more than Rs. 15,000 crore. The damage to the environment and infrastructure was colossal. He apprised that the Supreme Court also made an observation in July 2025 that revenue could not be earned at the cost of the environment and ecology, and it could prove detrimental for the entire state. The hill state of Himachal Pradesh has limitations in achieving revenue growth beyond a certain level.
Essential public services have to be provided as part of constitutional obligations, and with more than 67 per cent of our area as forest land, there was very little space to manoeuvre.
Himachal CM requested that the Revenue Deficit Grant (RDG) should be continued for a revenue deficit state like Himachal Pradesh. The justification for continuation and quantum of RDG has been reflected in additional memorandum and main memorandum submitted by the State Government to the Finance Commission, as per the release.

CM Sukhu requested not to taper RDG, which should be determined based on the realistic assessment of the State's revenues and expenditure projections during the award period by the 16th Finance Commission. He urged that RDG should be kept at a minimum level of Rs. 10,000 crore annually.
The Chief Minister said that a detailed justification for increasing the weightage for the criteria of forest and ecology has been submitted by the State to the Commission. He requested that snow covered-cum-cold desert areas, i.e. above the tree line, should be included along with very dense forests and moderately dense forest areas for their symbiotic relationship.
According to the release, CM Sukhu stated that the state had also requested the creation of a separate 'Green Fund' with an earmarked annual allocation of Rs. 50,000 crore for the hill States for the ecological services being provided to the country in various forms. This fund may be carved out or earmarked in the form of a scheme as Special Central Assistance to States for Capital Investment (SASCI). The matter had also been discussed with the Prime Minister and even through a letter written to him.
Himachal CM said there was a need to reframe the Disaster Risk Index (DRI) developed by the 15th Finance Commission, as the Himalayan region could not be equated with the rest of the country as far as various hazard vulnerabilities and their respective weightages were concerned. The uniform matrix developed does not include hazards such as landslides, snow avalanches, cloudbursts, forest fires, and Glacial Lake Outburst Floods (GLOFs), and the increased frequency of these hazards in recent years, impacting the mountainous region, was a case in point.
He said that because of low DRI, Himachal Pradesh did not get adequate resources from the 15th Finance Commission to meet its requirement of disaster relief, despite facing disproportionately higher brunt of disasters. He requested that a separate DRI be prepared for hill states by considering the unique indicators mentioned above, and a separate allocation be made for hill states, which could further be distributed horizontally amongst these states on the basis of the new DRI.
The Chief Minister said that since the 16th Finance Commission was in the process of finalising its report, the submissions of the state may be considered sympathetically while finalising the recommendations, so that the state finances remain sustainable. He assured the Chairman that the State would do everything possible to move towards a path of fiscal prudence.
The Advisor to the Chief Minister was also present on the occasion. (ANI)