Himachal is facing a loss of Rs 10,000 Cr every year due to the 16th Finance Commission: Agnihotri

GST is already harmful, now the Centre has dealt a double blow by abolishing RDG, this is unacceptable.
BJP MPs remained silent spectators and watched as the interests of the state were ignored

Deputy Chief Minister Mukesh Agnihotri, reacting strongly to the budget presented by the central government and the recommendations of the 16th Finance Commission, said that due to these decisions, Himachal Pradesh will suffer a direct financial loss of approximately 10,000 crore rupees every year. He said that this is not a temporary loss, but a long-term crisis that weakens the state’s financial structure, which is unacceptable to Himachal under any circumstances.
The Deputy Chief Minister said that the GST system has already proven detrimental to mountainous states like Himachal Pradesh, which have limited revenue resources. The state suffered a major economic setback with the abolition of GST compensation, and now the central government has dealt a second severe blow by eliminating the Revenue Deficit Grant (RDG). He stated bluntly that this decision is unacceptable.
He said that Himachal Pradesh’s total budget is approximately 58,000 crore rupees, with a significant portion of revenue expenditure going towards salaries, pensions, and other essential items. Consequently, any reduction in central assistance would naturally have a direct impact on the state’s development work and public welfare schemes.
The Deputy Chief Minister said that Himachal Pradesh had received approximately ₹38,000 crore in the form of RDG over the past five years. Given the current economic situation, it was natural to expect this assistance to increase to ₹50,000 crore, but instead, the RDG was abolished, posing serious financial challenges for the state.
Mr. Agnihotri said that at the time of Himachal’s formation, it was clear that due to its unique geographical conditions, the state could not be economically self-sufficient. The state was formed keeping in mind the political aspirations of its people and its difficult geographical location. At the same time, a national consensus was reached that the central government would provide special financial assistance to Himachal. He said that dependence on the central government is not a weakness, but part of a constitutional obligation.
The Deputy Chief Minister said that since 1952, the Central Government has had a tradition of providing special financial assistance to Himachal Pradesh. The Revenue Deficit Grant was the institutional form of that tradition. Ending it would be a policy injustice to the state.
Mr. Agnihotri said that this decision also goes against the spirit of the federal structure. Larger states have substantial resources and revenue sources, while the elimination of RDG will hurt mountainous states, northeastern states, and states with special circumstances the most.
The Deputy Chief Minister asked the seven BJP MPs and the Leader of the Opposition and former Chief Minister Jai Ram Thakur to clarify whether they sided with the central government’s decisions or with Himachal Pradesh. He said that remaining silent on a serious issue such as the annual loss of over 10,000 crore rupees is a direct compromise to the state’s interests, and the people of the state will not forgive it.