Shimla (Himachal Pradesh) [India], January 18 : A day after returning from New Delhi following a series of meetings with Union ministers, Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu on Saturday highlighted the state's growing fiscal challenges, sharp revenue losses due to GST and the need for special financial support for hill states.
Speaking to the media in Shimla, Sukhu said he had raised these concerns before the 16th Finance Commission and senior Union ministers, stressing that Himachal Pradesh could not be assessed on the same financial parameters as larger, consumption-driven states.
The Chief Minister said revenue deficit grants (RDG) to the state had been consistently reduced over the years, adding pressure on the state exchequer. He pointed out that while the 15th Finance Commission had approved substantial RDG, the allocation had gradually declined, forcing the state to adopt strict fiscal discipline.
Referring to the Goods and Services Tax regime, Sukhu said GST had caused long-term revenue losses to Himachal Pradesh and other hill states.
"GST is consumer-based. We are a production state, but the benefit goes to states with higher consumption and population. Himachal will never get the real benefit of GST under the present system," he said.
He added that prior to GST, industrial hubs such as Baddi generated significant revenue through VAT and excise duties, which was later partially compensated only for a limited period. The reduction in GST rates, particularly for the cement industry, had further reduced the state's earnings, he said.
Sukhu also raised concerns over disaster-related expenditure, stating that the cost of restoring infrastructure in hilly terrain is far higher than in the plains and should be factored into national disaster assessment parameters.
On pension reforms, the Chief Minister reiterated that the Old Pension Scheme was restored with a long-term perspective and not for political considerations, adding that the state had taken the decision despite fiscal constraints.
He said he had also discussed issues related to apple imports with Union Commerce Minister Piyush Goyal and hydropower royalty payments with the Union Power Minister, asserting that the state government would continue to pursue all pending matters in the interest of Himachal Pradesh. Sukhu also said that the state cabinet reshuffle is also on cards soon and new schemes would be launched soon.