Quick Summary
The government of Himachal Pradesh has raised concerns over growing fiscal pressure after the Union government decided to discontinue the Revenue Deficit Grant (RDG). Chief Minister Sukhvinder Singh Sukhu has warned that reduced central assistance is widening the states revenue gap at a time when expenditure commitments remain high. In a communication to Union Finance Minister Nirmala Sitharaman, the Chief Minister stated that the formula used by the Finance Commission does not adequately accou
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FAQ :
The Chief Minister is concerned about the rising fiscal pressure on Himachal Pradesh due to the Union government discontinuing the Revenue Deficit Grant (RDG).
He argues that the formula does not adequately account for the structural challenges and higher costs of infrastructure, healthcare, and connectivity in small hill states.
The end of the GST compensation regime has also contributed to reduced fiscal flexibility for the state.
A large portion of the state's budget is spent on salaries, pensions, interest payments, and welfare schemes, leaving limited funds for development.
He is urging the Centre to reconsider the RDG allocation formula and provide special financial support to hill states with unique geographic and economic challenges.
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