CM Sukhu met the Chairman of the 16th Finance Commission, Dr. Arvind Panagariya, in New Delhi on Thursday to discuss critical fiscal matters concerning Himachal Pradesh’s financial sustainability and its unique geographic and ecological challenges.
During the meeting, the Chief Minister strongly advocated for the continuation of the Revenue Deficit Grant (RDG) for Himachal Pradesh, a revenue-deficit state severely constrained in its capacity to generate income due to geographical limitations and ecological responsibilities. He highlighted that over 67% of the state’s land is forested, limiting revenue avenues while the constitutional obligation to provide essential public services remains unchanged.
Sukhu emphasized that Himachal has suffered devastating natural disasters over the past three years, resulting in a loss of over ₹15,000 crore and extensive damage to infrastructure and ecology. Referring to the Supreme Court’s July 2025 observation, he reminded that revenue generation at the cost of environmental degradation is not sustainable, particularly for ecologically fragile hill states.
The CM urged the Commission not to taper the RDG and proposed that the minimum RDG allocation should be ₹10,000 crore annually, based on realistic projections of state revenue and expenditure as detailed in the state’s main and additional memoranda.
He also reiterated the state’s request for the creation of a Green Fund with an annual allocation of ₹50,000 crore, specifically for hill states. This fund, proposed as a form of Special Central Assistance for Capital Investment (SASCI), would recognize the ecological services these states provide to the nation.
Another key demand raised was the revision of the Disaster Risk Index (DRI), initially developed by the 15th Finance Commission. Sukhu stated that the current uniform DRI fails to account for region-specific hazards such as landslides, avalanches, cloudbursts, forest fires, and GLOFs—threats that are increasingly affecting the Himalayan region. He argued for a separate DRI for hill states with unique indicators and requested dedicated funding based on this revised index.
Due to the low DRI under the 15th Finance Commission, Himachal Pradesh did not receive adequate disaster relief funding, despite facing frequent and severe natural disasters. The Chief Minister stressed that hill states must be assessed through a distinct framework to ensure equitable and need-based resource allocation.
Concluding the meeting, CM Sukhu urged the Finance Commission to sympathetically consider Himachal’s submissions during the finalization of its recommendations. He assured the Chairman of the state’s commitment to fiscal discipline while seeking just support to overcome structural and environmental challenges.
The Advisor to the Chief Minister was also present during the meeting.
