Himachal CM Sukhu Slams Union Budget, Calls RDG End a 'Black Day' for State
Himachal CM Sukhu: RDG End a 'Black Day', Violates Constitution

Himachal CM Sukhu Slams Union Budget, Calls RDG End a 'Black Day' for State

Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu has launched a scathing critique of the Union Budget 2026-27, describing it as a "labyrinth of neglect" that fails to address the state's pressing priorities. His criticism centers on the discontinuation of the Revenue Deficit Grant (RDG) in the recently tabled 16th Finance Commission report, a move he termed a "black day" for Himachal Pradesh.

Constitutional Violation Alleged

Addressing media at his official residence in Shimla, Sukhu asserted that the demolition of RDG constitutes a direct violation of Article 275(1) of the Indian Constitution. "We are examining all legal aspects and will discuss this in the next Cabinet meeting before taking a decision," he stated. The Chief Minister emphasized that from 1952 through the 15th Finance Commission, these grants were regularly provided by the Centre to states, making this discontinuation unprecedented.

Fiscal Realities Ignored

Sukhu highlighted several structural challenges that make RDG crucial for Himachal Pradesh:

  • High forest and ecological cover of approximately 67%
  • Higher per-capita cost of service delivery in mountainous terrain
  • Repeated natural disasters causing losses exceeding ₹15,000 crore in recent years
  • Limited revenue base with only 10% of land suitable for industrial activity

"The complete withdrawal of RDG ignores the fiscal realities of hill states," Sukhu declared, noting that the state had expected around ₹50,000 crore during the 16th Finance Commission period, slightly higher than the ₹40,000 crore allocated previously.

Budget Disappointments and Specific Concerns

The Chief Minister expressed multiple concerns regarding the Union Budget's impact on Himachal Pradesh:

  1. No significant announcements for the state's hill-specific priorities including hydropower development, eco-tourism, and road/rail connectivity
  2. Discontinuation of GST compensation resulting in significant annual revenue losses
  3. No enhancement of the ₹1.5 lakh crore allocation for interest-free loans to states
  4. No recognition for apple growers contributing approximately ₹5,000 crore to the state's economy
  5. No allocation for key rail projects like Bhanupali-Bilaspur and Baddi-Chandigarh lines

Broader Implications and Demands

Sukhu warned that the absence of adequate RDGs will constrain Himachal Pradesh's ability to deliver essential public services, maintain fiscal sustainability, and invest in future growth. This could force difficult choices between service delivery and increased indebtedness.

The Chief Minister reiterated several demands:

  • A dedicated "Green Fund" for hill states to compensate for preserving forests and ecological services
  • State-specific grants for disaster management and debt relief
  • Enhanced funding for local bodies
  • Special provisions tailored to hill regions' unique needs
  • Financial devolution to hill states at least double their population share

Political Accusations and Future Course

Accusing the Centre of systemic discrimination, Sukhu stated that BJP MPs from Himachal Pradesh appear to believe safeguarding state interests is solely the state government's responsibility. "The Centre has betrayed the people of Himachal Pradesh. The removal of RDG pushes hill states into a grave fiscal crisis and undermines the spirit of cooperative federalism," he asserted.

Sukhu revealed he had met with 16th Finance Commission Chairman Dr. Arvind Panagariya four times and held multiple meetings with Union Finance Minister Nirmala Sitharaman, urging enhanced RDG for Himachal Pradesh. Despite these efforts, both the Budget and Finance Commission report have disappointed the state, which he said has been given a "jhunjhuna (a rattle)" in the name of grants and financial assistance.

The Chief Minister also criticized the GST regime's adverse impact on state finances and flagged Free Trade Agreements' effect on apple growers. He concluded that the Budget failed to address critical national issues including unemployment, poverty, and escalating prices, appearing to favor the wealthy over common citizens.