Himachal CM Sukhu urges Niti Aayog to form hill states panel on RDG loss
Synopsis
At the 11th NITI Aayog Governing Council meeting, Himachal CM Sukhu laid out a sweeping fiscal case: ₹90,000 crore in uncompensated ecological services, ₹25,000 crore in GST losses over eight years, ₹7,000 crore in unpaid BBMB arrears, and a demand to double hill-state RDG support to ₹50,000 crore — all backed by a call for a dedicated high-level committee to force the Centre's hand.
Key Takeaways
Himachal Pradesh CM Sukhvinder Sukhu raised multiple fiscal grievances at the 11th NITI Aayog Governing Council Meeting on 11 June in New Delhi .
He demanded the Revenue Deficit Grant allocation for hill states be doubled from ₹25,000 crore to ₹50,000 crore .
Himachal Pradesh provides ₹90,000 crore in annual ecological services, per an Indian Institute of Forest Management study, but receives no compensation.
Arrears of ₹7,000 crore from the Bhakra Beas Management Board (BBMB) remain unpaid; the state is also awaiting ₹1,500 crore in promised disaster relief.
GST-related revenue losses have totalled ₹25,000 crore over eight years , according to Sukhu.
He urged PM Modi to form a high-level committee for hill states to assess all these losses and submit a report to the Government of India.
Himachal Pradesh Chief Minister Sukhvinder Sukhu on Thursday, 11 June urged Prime Minister Narendra Modi to constitute a high-level committee for hill states to assess financial losses stemming from the discontinuation of the Revenue Deficit Grant (RDG), natural disaster damages, deprivation of free hydropower, and revenue shortfalls under the GST regime. Sukhu made the appeal at the 11th Governing Council Meeting of NITI Aayog in New Delhi, arguing that the state deserves a far greater share of central support than it currently receives.
The RDG Demand
Sukhu described the discontinuation of the Revenue Deficit Grant as a serious blow to Himachal Pradesh's fiscal health. He said the ₹25,000 crore extended to all hill states — at the request of their chief ministers — falls well short of actual losses, and demanded the allocation be doubled to ₹50,000 crore to enable uninterrupted development activity. The proposed high-level committee, he said, should prepare a detailed report for submission to the Government of India so that hill states receive their due compensation.
Ecological Services and Power Dues
The Chief Minister said Himachal Pradesh delivers ₹90,000 crore worth of ecological services annually to the nation, citing a study by the Indian Institute of Forest Management. Despite this, the state receives no corresponding compensation for its role in preserving forests and watersheds. Sukhu described the state as 'the green frontier of the country' and called for special attention from the Centre to realise the vision of Viksit Bharat in its true spirit.
On hydropower, he said the state is being deprived of fair and free power from 13,000 MW of generation capacity within its borders, and flagged that arrears of ₹7,000 crore from the Bhakra Beas Management Board (BBMB) remain outstanding.
Disaster Relief and GST Losses
Sukhu also raised the issue of recurring natural disaster damage, noting that a ₹1,500 crore special assistance package announced by the Centre has yet to be released to the state. Separately, he said Himachal Pradesh has incurred cumulative revenue losses of ₹25,000 crore over eight years as a direct consequence of the current GST framework — losses he argued have never been adequately addressed.
The Broader Context
This is not the first time hill states have raised these concerns at the Governing Council. Himachal Pradesh has consistently argued that its mountainous geography, ecological constraints, and limited revenue base make it structurally dependent on central transfers in ways that the current fiscal architecture does not fully account for. The state's demands at this meeting reflect a pattern of grievances that have built up since the 15th Finance Commission phased out RDG support. How the Centre responds — particularly on the proposed committee — will signal whether these concerns receive institutional attention or remain on record without resolution.
Point of View
000 crore ecological contribution with zero compensation, ₹7,000 crore in BBMB arrears, and ₹25,000 crore in GST losses together represent a structural transfer of value from Himachal Pradesh to the rest of India that the current fiscal architecture simply does not account for. The demand for a high-level committee is tactically smart: it asks not for immediate money but for an institutional process, which is harder to refuse at a Governing Council table. The real question is whether the Centre treats this as a legitimate hill-state equity issue or as routine pre-budget lobbying — because the distinction will determine whether these grievances get a framework or just another acknowledgement.
NationPress
29 Jul 2026
Frequently Asked Questions
Why is Himachal Pradesh demanding a high-level committee at NITI Aayog?
Chief Minister Sukhu has called for a high-level committee to formally assess the financial losses hill states have suffered due to RDG discontinuation, natural disasters, hydropower deprivation, and GST shortfalls. The committee would submit a detailed report to the Government of India to ensure these states receive adequate compensation.
What is the Revenue Deficit Grant (RDG) and why does its discontinuation matter for Himachal Pradesh?
The Revenue Deficit Grant is a central transfer provided to states whose expenditure exceeds their revenue, helping bridge fiscal gaps. Its discontinuation has been described by Sukhu as a major blow to Himachal Pradesh's economy, with the current ₹25,000 crore allocation to all hill states considered insufficient — he is demanding it be raised to ₹50,000 crore.
How much has Himachal Pradesh lost due to the GST regime?
According to Chief Minister Sukhu, Himachal Pradesh has incurred revenue losses of ₹25,000 crore over eight years as a result of the current GST framework. He raised this figure at the 11th NITI Aayog Governing Council Meeting on 11 June.
What are the pending dues from the Bhakra Beas Management Board?
Sukhu stated that arrears of ₹7,000 crore from the Bhakra Beas Management Board (BBMB) remain outstanding. He also noted that the state is being denied fair and free power from 13,000 MW of hydropower generation capacity within its borders.
What disaster relief has Himachal Pradesh been promised but not received?
The Centre announced ₹1,500 crore in special assistance for Himachal Pradesh following natural disaster damage. As of the 11 June Governing Council meeting, Sukhu said the state is still awaiting the release of these funds.
