RDG Abolition Could Hit Himachal’s Economy Hard
Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu on Sunday (February 8, 2026) warned that the 16th Finance Commission’s plan to scrap Revenue Deficit Grants (RDG) could harm the state’s economy long-term. He called the issue a matter of public rights.
He urged MPs and BJP MLAs to join him in meeting Prime Minister Narendra Modi to protect Himachal Pradesh’s financial interests.
Cross-Party Appeal to Protect State Rights
CM Sukhu said, “Abolishing RDG is not only a government issue; it affects the people’s rights. We are ready to meet the Prime Minister with MPs and BJP MLAs. Losing RDG will make it hard to reclaim our rights.”
He also mentioned that BJP MLAs were invited to a Finance Department presentation, but they did not attend. He highlighted that Himachal Pradesh is among the worst affected states, with 12.7% of the budget relying on RDG, the second highest in India.
Post-GST Tax Growth and Revenue Challenges
The Chief Minister explained that tax collection growth has slowed to around 8% after GST, compared to 13–14% earlier. He urged everyone to work together to protect the state’s interests.
Sukhu added that the government aims to make Himachal Pradesh self-reliant. Since taking office, the government has generated ₹26,683 crore from its own resources, but revenue mainly comes from river waters, forests, and tourism.
Constitutional Provision and Long-Term Impact
Officials noted that RDG is a constitutional provision under Article 275(1) and was provided until the 15th Finance Commission.
Sukhu stressed that Himachal Pradesh was formed based on public aspiration, not financial viability. Scrapping RDG will affect future governments and may harm the people of the state.
