- Seeks Additional Financial Assistance; Requests Enhancement of Borrowing Limit from 3 to 4 percent
- Seeks exemption of SASCI payments from SNA-SPARSH and doubling of assistance under externally aided projects (EAPs)
Chief Minister Thakur Sukhvinder Singh Sukhu met Union Finance and Corporate Affairs Minister Nirmala Sitharaman in New Delhi, today. He apprised the Union Minister of the current financial position of Himachal Pradesh and the financial challenges being faced by the state. He urged the Union Government to provide additional financial assistance, keeping in view the state’s unique geographical and economic condition.
The Chief Minister said that with the discontinuation of the Revenue Deficit Grant (RDG) from the financial year 2026-27, following the recommendations of the 16thFinance Commission, Himachal Pradesh is facing an annual financial gap of around Rs. 8,000 crore. He said the continuous reduction in the Revenue Deficit Grant over the past few years had further increased pressure on the state’s finances.
He said that Himachal Pradesh, being a hill State, faces difficult geographical conditions, high vulnerability to natural disasters and higher costs of creation and maintenance of infrastructure, making the delivery and operation of public services comparatively more expensive.
Sh. Sukhu said that despite limited resources, the state government has been making sustained efforts to improve its financial position through various financial reforms and revenue-generation measures. He emphasized that, in view of the state’s geographical conditions and the heavy losses caused by natural disasters in recent years, additional support from the Union Government is essential.
The Chief Minister also urged the Union Government to provide exemption to supply and vendor payments under the Special Assistance to States for Capital Investment (SASCI) scheme from the SNA-SPARSH model .
He further urged the Union Finance Minister to enhance the allocation for Externally Aided Projects (EAPs) for Himachal Pradesh and consider doubling the assistance under this component, keeping in view the state’s difficult geographical conditions, higher infrastructure costs and developmental requirements.
The Chief Minister also requested that the state’s borrowing limit be enhanced from the existing 3 to 4 percent of the Gross State Domestic Product (GSDP). He said that the additional fiscal space would enable the state to meet its committed liabilities while mobilizing adequate resources for essential public services and developmental priorities.
He urged the Union Finance Minister to assess Himachal Pradesh’s financial challenges in the context of its unique geographical and economic circumstances and sought generous financial assistance and necessary approvals from the Union Government in the larger interest of the state.
The Chief Minister also apprised the Union Finance Minister of various measures being undertaken by the state government to improve its financial position through its own limited resources. He said the state government was taking several important steps to strengthen the rural economy and enhance the income of rural households.
He said Himachal Pradesh had become the first state in the country to provide Minimum Support Price (MSP) for crops produced through natural farming. The initiative aims to ensure remunerative prices for farmer's produce, enhance the per capita income of rural households and strengthen the State’s economy.
Union Finance Minister Nirmala Sitharaman assured the Chief Minister that the demands raised by the Himachal Pradesh Government would be considered sympathetically, keeping in view the state’s financial requirements and developmental priorities. Acknowledging the financial challenges faced by the state, she assured that the Union Government would extend necessary support to meet its legitimate financial requirements.
She also assured that additional financial assistance under Special Central Assistance for Himachal Pradesh would be considered, which would help the state meet its developmental requirements and strengthen its financial position.
Chief Secretary Kamlesh Kumar Pant, Principal Advisor to the Chief Minister Ram Subhag Singh, Principal Secretary (Finance) Devesh Kumar, Secretary to the Chief Minister Rakesh Kanwar and Principal Resident Commissioner Ajay Kumar along with senior officials of the Union Ministry of Finance were present in the meeting.
