Himachal Pradesh Faces Economic Challenge: Impact of Revenue Deficit Grant Discontinuation

The discontinuation of the Revenue Deficit Grant (RDG) is set to be a major point of discussion in the Himachal Pradesh Budget session, which begins with the governor's address. The decision could impact the state economy by depriving it of Rs 10,000 crore annually until 2031.

The Himachal Pradesh Budget session is poised to focus heavily on the implications of ceasing the Revenue Deficit Grant (RDG). The session, beginning with the governor's address, will last three days and prioritize government business.

Chief Minister Sukhvinder Singh Sukhu expressed concerns that discontinuing RDG could cost the state Rs 10,000 crore annually, significantly impacting the state's finances as RDG constitutes 12.7% of the state budget. The shortfall between revenue and expenditure is further compounded, with the state's needs surpassing its earnings by Rs 6,050 crore.

Opposition leader Jai Ram Thakur pointed out that the discontinuation follows a structured phase-out recommended by previous Finance Commissions. In anticipation of protests and rallies, the Assembly complex is fortified with an increased police presence.

(With inputs from agencies.)