Himachal CM Sukhu meets Nirmala Sitharaman amid financial crunch, seeks special Central assistance

In the wake of the Finance Commission's recommendation to discontinue the Revenue Deficit Grant, Sukhvinder Singh Sukhu requested that Nirmala Sitharaman form a committee to properly assess the economy of Himachal Pradesh.

3 min readShimlaUpdated: Mar 2, 2026 04:27 PM IST

Himachal CM Sukhu meets Niramala Sitharaman

Himachal CM Sukhvinder Singh Sukhu with Union Finance Minister Nirmala Sitharaman in New Delhi.

Twelve days after the Himachal Pradesh Assembly passed a resolution urging the Centre to restore the Revenue Deficit Grant (RDG), Chief Minister Sukhvinder Singh Sukhu Monday called on Union Finance Minister Nirmala Sitharaman in Delhi seeking a financial package under special Central assistance to cover the revenue deficit for the financial year 2026-27. Sukhu also requested Sitharaman to constitute a committee to assess the hill state’s economy properly.

On February 18, the state Assembly passed a resolution condemning the 16th Finance Commission’s (FC) recommendations to discontinue the RDG for many states, including Himachal Pradesh. Sitharaman tabled the 16th FC report in Parliament on February 1. Sukhu termed that day a ‘black day’ for the people of Himachal Pradesh, stating that RDG was not merely a grant but a constitutional right of the state.

RDG is financial assistance provided by the Centre to a state to bridge the gap between revenue expenditure and revenue receipts. If a state’s regular income is less than its routine expenditure, the Centre provides funds to cover the shortfall. CM Sukhu said the state was expecting around Rs 50,000 crore in RDG for the 2026-31 grant period.

During his meeting, Sukhu apprised Sitharaman that discontinuation of RDG will have a far-reaching adverse impact on the state’s financial health and added that Himachal Pradesh cannot be compared to the other 16 states whose RDG has been discontinued.

He said RDG’s contribution to the state was about 12.7 per cent, the second-highest after Nagaland. He said big states can withstand the discontinuation, but the economy of Himachal Pradesh cannot. He added that assessing all states on a single yardstick was neither healthy nor transparent.

‘Undermining cooperative federalism’

He termed the discontinuation as “undermining the spirit of cooperative federalism”. He said Article 275(1) of the Constitution provides for such grants to the state which cannot bridge the gap between their revenue receipts and expenditure. He said that this was the first time the Finance Commission had totally ignored the developmental needs of small hill states.

He also informed Sitharaman that over the last two to three years, several measures had been taken to reduce expenditure. No off-budget borrowing was undertaken, and approximately Rs 600 crore was generated annually through various cesses, he added.

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He said the state suffered revenue losses due to GST and added that, despite raising tax rates wherever feasible and rationalising subsidies, the revenue gap cannot be bridged. Sources said Sitharaman assured sympathetic consideration of the state’s demands. Principal Advisor to Chief Minister Ram Subhag Singh and Principal Secretary Finance Devesh Kumar accompanied the Chief Minister.

On February 8, Principal Secretary (Finance) Devesh Kumar gave a detailed presentation, stating that all welfare schemes, including the Old Pension Scheme (OPS) and other social security schemes, will have to be withdrawn if the state does not receive the RDG.

Saurabh Parashar

Saurabh Parashar is an Assistant Editor at The Indian Express, primarily responsible for the publication’s coverage of Himachal Pradesh. He is a seasoned journalist with over 17 years of experience in print media, specializing in crime, legal affairs, and investigative reporting. Professional Background Education: He holds a Master’s degree in Mass Communication from Guru Jambheshwar University of Science & Technology (Hisar) and a Law degree from Himachal Pradesh University (HPU), Shimla. This legal background significantly informs his reporting on complex judicial and administrative matters. Career Path: Before joining The Indian Express in 2017, he spent 12 years with The Times of India. Core Beats: His primary focus is the socio-political landscape of the hill state, with a specific emphasis on the environment, forest conservation, drug menace (specifically "Chitta"), affairs related to tribal and archaeology and the unique challenges of governance in high-altitude regions. Recent Notable Articles (Late 2025) His recent reporting highlights the critical intersection of policy, law, and social safety in Himachal Pradesh: 1. "Himachal’s battle against Chitta: Why the border areas are most vulnerable" (Late 2025): An investigative look at the transit routes from Punjab and the impact on local youth. 2. "Shimla ropeway clears key hurdle as 820 trees face the axe :According to the Forest Survey of India’s 2021 assessment, 47.21 percent of Shimla’s 5,131 sq km geographical area is under forest cover (Nov 17, 2025). 3. "Himachal to handover 2.7427 ha of non-forest land for Shimla Ropeway: Given the land’s non-forest nature, RTDC and the state will not require permission from MoEFCC" (Nov 18, 2025) 4. "How the centuries-old Jodidara tradition is fading in Himachal’s Trans-Giri region: Jodidara: a form of fraternal polyandry—has long been part of Hatti tribal culture in the Trans-Giri region of Himachal Pradesh and adjoining Uttarakhand. It is believed to have evolved to prevent division of ancestral land and maintain unity among brothers in the harsh, mountainous terrain" (Aug 18, 2025) Legal & Agricultural Affairs "Kisan Sabha hails SC’s setting aside Himachal HC order to remove orchards from forest land" (Dec 18, 2025): Covering a major Supreme Court victory for farmers, where a High Court order to remove fruit-bearing apple orchards was overturned. "Himachal Cabinet nod to new tourism policy; focus on home-stays in tribal areas" (Dec 11, 2025): Detailing the legislative push to decentralize tourism and bring economic benefits to Lahaul-Spiti and Kinnaur. 3. Governance & Environment "Forest rights and development: Why Himachal is seeking more leeway from Centre" (Dec 19, 2025): Reporting on the legal hurdles faced by the state in infrastructure projects due to the Forest Conservation Act. "Cloudbursts and resilience: How Himachal’s remote villages are building back better" (Nov 2025): Following up on the long-term rehabilitation efforts after monsoon-related disasters. Crime especially cyber crimes, crypto currency etc: crypto currency: "Agents in uniform, motivational speeches, lavish parties: How a Himachal crypto con went unnoticed:A serial conman, a ‘Nelson Mandela Nobel Peace Award winner', and retired policemen got together to pull off a Rs 1,740-crore fraud" (Nov 10, 2023) Signature Beats Saurabh is recognized for his tenacious reporting on the state's drug epidemic. His deep familiarity with the topography and tribal culture of Himachal allows him to report from remote locations like Spiti, Pangi, Shillai, which are often overlooked by national media. His legal expertise makes him a primary choice for covering the Himachal Pradesh High Court on issues ranging from local body elections to environmental PILs. X (Twitter): @saurabh_prashar . ... Read More

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