Shimla: Chief Minister Sukhvinder Singh Sukhu has convened a Cabinet meeting to deliberate on the discontinuation of Revenue Gap Grant (RGI) to Himachal Pradesh and to formulate a proposal seeking its restoration from the Central Government.
Himachal Pradesh, along with 16 other states, had been receiving Revenue Deficit Grant under recommendations of the Finance Commission. However, with recent changes in the central fiscal framework, the grant has reportedly been discontinued, prompting concern within the state government over its financial implications.
According to sources, the Cabinet will discuss the impact of the halted RGI funds on the state’s economy and ongoing development works. Legal and constitutional options are also expected to be examined before forwarding a formal proposal to the Centre.
The state government maintains that Revenue Deficit Grant has played a crucial role in bridging Himachal’s fiscal gap, particularly given its difficult terrain, limited revenue base, and higher infrastructure costs. Officials argue that discontinuation of the grant could affect developmental schemes and welfare initiatives.
Meanwhile, the Finance Department has also initiated consultations for the 2026–27 state budget, inviting public suggestions through an online portal to ensure participatory planning.
As per central budget allocations for the coming financial year, Himachal Pradesh is expected to receive ₹13,949 crore in various transfers and grants. However, the state government believes restoration of RGI remains vital for maintaining financial stability.
The Cabinet’s decision is likely to shape the state’s fiscal strategy in the coming months, with the proposal to the Centre expected soon after the meeting.
