Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu has asked the Centre to form a high-level committee. This committee would evaluate the financial losses experienced by hill states, especially Himachal Pradesh, due to the end of the Revenue Deficit Grant, GST-related revenue shortfalls, and repeated natural disasters. Sukhu made this request during the 11th Governing Council meeting of NITI Aayog, which Prime Minister Narendra Modi chaired. This issue has renewed focus on financial losses in Himachal Pradesh, including the Revenue Deficit Grant, GST compensation, hill states funding, and disaster relief support, which the state government says are putting severe pressure on its finances.

The Chief Minister pointed out that the state’s financial difficulties have worsened in recent years. This is due to reduced central financial support, climate-related disasters, and insufficient compensation mechanisms. The state government believes that the financial losses, Revenue Deficit Grant, GST compensation, funding for hill states, and disaster relief support need careful examination by an expert panel.

Demand for Assessment of Revenue Deficit Grant Impact

A major issue the Chief Minister highlighted was the end of the Revenue Deficit Grant. This grant has usually helped smaller and geographically challenging states close the gap between spending and revenue. Sukhu said that losing the grant has heavily affected the state's finances and its ability to fund development projects and public welfare programs.

The state government has consistently stated that Himachal Pradesh faces unique geographical and economic challenges compared to larger states. The mountainous terrain, scattered populations, and high infrastructure costs make governance and development more expensive. Sukhu argued that these issues should be taken into account when deciding on financial aid and revenue-sharing for hill states.

GST Regime and Revenue Losses

Another significant concern raised by the Chief Minister revolves around revenue losses under the Goods and Services Tax system. The state government estimates that Himachal Pradesh has experienced substantial revenue losses since GST began. Sukhu noted that these cumulative losses, along with the end of compensation mechanisms, have negatively impacted the state’s financial stability.

He emphasized that states with limited industrial bases and tough geographical conditions need special consideration within the GST framework. The suggested committee, he stated, should look into the long-term effects of GST on hill states and propose solutions to address financial disparities.

Natural Disasters Continue to Strain Resources

The Chief Minister also pointed out the growing financial strain caused by repeated natural disasters. Himachal Pradesh has faced severe weather events, including floods, landslides, and cloudbursts, which have damaged infrastructure and disrupted economic activity. The costs of rehabilitation and rebuilding have put additional pressure on the state’s finances.

Sukhu mentioned that despite suffering from multiple disasters, the state has not received enough compensation to fully cover the losses. He called for a quicker release of disaster relief funds and a more realistic assessment of the challenges faced by mountain states, which are especially vulnerable to climate-related events.

Call for Greater Support to Hill States

During the meeting, the Chief Minister argued that current financial provisions for hill states are inadequate. He urged the Centre to improve support systems and reevaluate existing funding arrangements to ensure ongoing development in mountainous areas. According to him, special category states need policy changes that reflect their specific developmental needs and environmental responsibilities.

He further stressed that Himachal Pradesh plays a significant role in environmental conservation and ecological protection. The state manages forests, watersheds, and natural resources that offer benefits beyond its borders. Sukhu argued that these contributions should be recognized through increased financial support and compensation mechanisms.

Hydropower and Pending Financial Claims

The Chief Minister also expressed concerns about the state’s share in hydropower projects within Himachal Pradesh. He said the state has not received fair benefits despite providing land and natural resources for electricity generation. Greater involvement in hydropower revenues, he argued, would boost the state’s finances and support development efforts.

In addition, Sukhu pointed out pending financial claims, including arrears related to power issues and delayed disaster assistance. Addressing these outstanding matters, he said, would deliver much-needed financial relief to the state government.

Centre Asked to Take a Comprehensive View

The Chief Minister concluded by urging the Union Government to take a broad approach to the economic challenges facing hill states. He said the proposed high-level committee should assess losses from the end of Revenue Deficit Grants, GST implementation, natural disasters, and limitations in hydropower revenue sharing. Its recommendations, he added, could help create a fairer system for financial assistance and long-term development.

This demand reflects Himachal Pradesh’s wider effort to secure more fiscal support amid increasing financial pressures. The outcome of the proposal and the Centre’s response will be closely observed, as it could shape future funding policies for mountain states throughout India.