Himachal faces financial crisis, CM Sukhu, ministers defer drawing salary for 2 months

Expressing deep concern over the state's grim financial condition, Himachal Pradesh chief minister Sukhvinder Singh Sukhu on Thursday announced that he, his ministers, chief parliamentary secretaries and chairpersons and vice-chairpersons of boards and corporations would defer drawing their salaries and allowances for two months.

Speaking in the state assembly, Sukhu revealed that the Revenue Deficit Grant (RDG)– financial support provided by the central government to states to help cover the gap between their revenue receipts and revenue expenditure– for the fiscal year 2023-24 stands at ₹8,058 crore.

He said the grant has only been reduced by ₹1,800 crore to ₹6,258 crore in the current financial year.

"In 2025-26, the revenue deficit grant will be reduced by another ₹3,000 crore to a mere ₹3,257 crore, which will make it even tougher for us to meet our needs," he added.

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Sukhu said the government was making all efforts to boost revenue and cut unproductive spending, but the benefits of these efforts are not expected to be realised immediately.

The chief minister also said no funds have been released against the ₹9,042 crore Post-Disaster Need Assessment (PDNA) to repair damage to roads, bridges and infrastructure caused during the monsoon in 2023, adding to the state's fiscal challenges.

₹9,200 crore deducted from employees under the National Pension Scheme (NPS) has not been refunded by the Centre despite numerous requests from the state government, according to Sukhu.

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The chief minister also pointed out that the cessation of GST compensation from the Centre since June 2022 has led to an annual revenue shortfall of ₹2,500-3,000 crore. The state's borrowing limit was reduced by ₹2,000 crore following the reinstatement of the Old Pension Scheme (OPS), further straining the state's finances.

Sukhu urged other members of the assembly to follow his lead in deferring their salaries and allowances.

Sukhu blames previous BJP govt

“The state's situation is not good, and if anyone is responsible for this, it is the previous BJP government. They had received around ₹10,000 crore from the revenue deficit grant according to the 15 Finance Commission, and since then this grant has been reducing,” Sukhu later said at a press conference.