Sukhu Seeks Greater Financial Support from Centre
Chief Minister Thakur Sukhvinder Singh Sukhu on Tuesday made a strong case for enhanced financial assistance to Himachal Pradesh during a meeting with Union Finance and Corporate Affairs Minister Nirmala Sitharaman in New Delhi. Highlighting the unique challenges faced by the hill state, he urged the Centre to extend additional support to help sustain development and public welfare initiatives.
During the meeting, the Chief Minister explained that Himachal Pradesh is expected to face a significant financial strain following the discontinuation of the Revenue Deficit Grant (RDG) from the 2026-27 financial year under the recommendations of the 16th Finance Commission. According to the state government, this will create an annual resource gap of nearly ₹8,000 crore, adding to the financial pressure already caused by the gradual reduction of the grant in recent years.
Sukhu pointed out that Himachal’s mountainous terrain, scattered habitations and vulnerability to natural disasters make the construction and maintenance of infrastructure far more expensive than in many other states. These factors inevitably increase the cost of delivering essential services to people living in remote and difficult-to-access areas.
Despite these challenges, he said, the state government has been pursuing financial reforms and revenue-generation measures to strengthen its economy through its own resources. However, the scale of losses caused by repeated natural disasters and the constraints imposed by geography make additional support from the Centre crucial for sustaining growth and development.
The Chief Minister also sought relief under the Special Assistance to States for Capital Investment (SASCI) scheme by requesting the exemption of supply and vendor payments from the SNA-SPARSH model. In addition, he urged the Union Government to increase allocations for Externally Aided Projects (EAPs), arguing that Himachal’s development needs and higher infrastructure costs justify enhanced funding support.
Another key issue raised during the discussion was the state’s borrowing limit. Sukhu requested that the existing borrowing cap be increased from 3 percent to 4 percent of the Gross State Domestic Product (GSDP), saying the additional fiscal space would help the state meet committed liabilities while continuing investment in essential services and development programmes.
The Chief Minister also highlighted steps taken by the state government to strengthen the rural economy. He noted that Himachal Pradesh has become the first state in the country to provide a Minimum Support Price (MSP) for crops grown through natural farming, a move aimed at improving farmers’ incomes, supporting sustainable agriculture and boosting rural prosperity.
Responding positively, Union Finance Minister Nirmala Sitharaman assured the Chief Minister that the concerns and demands raised by the Himachal Pradesh Government would receive sympathetic consideration. Acknowledging the financial pressures faced by the state, she assured that the Centre would extend necessary support to address its legitimate requirements.
She also indicated that additional assistance under Special Central Assistance for Himachal Pradesh would be considered, a step that could help the state fund development projects and strengthen its financial position in the coming years.
Senior officials from both the state and central governments were present during the meeting, which focused on ensuring that Himachal Pradesh continues to receive adequate financial support to meet its developmental aspirations despite the challenges posed by its terrain and economic circumstances.
