Shimla, February 4, 2026:
The controversy over the discontinuation of the Revenue Deficit Grant (RDG) in the Union Budget has intensified in Himachal Pradesh, with Chief Minister Sukhvinder Singh Sukhu warning that the state could face serious financial consequences. Indicating tough measures ahead, the Chief Minister signaled that electricity tariffs may rise as the government looks for alternative revenue sources.
Speaking at the inauguration of a new branch of the Himachal Pradesh State Cooperative Bank in Kaithu, Sukhu said the state had never imagined that the constitutional grant would be stopped. He announced that a Cabinet meeting has been convened on February 8 to deliberate on the issue. A meeting of all MLAs, including BJP legislators, will also be called the same day, where a detailed presentation will be made on the financial impact of the RDG withdrawal.
“People Must Be Ready for Struggle”
The Chief Minister stated that from 2015 to 2019, Himachal Pradesh received nearly ₹48,000 crore under RDG, and the grant has been in place since 1952. He described its sudden discontinuation as a “serious crisis” for the hill state.
“This is the time to rise above party lines. All political parties must unite and approach the Centre together. The people of Himachal may also have to prepare for a struggle if the RDG is not restored,” Sukhu said.
Government to Tax Power Projects
In what appears to be a strong warning of fiscal tightening, Sukhu announced that the state government will begin levying taxes on hydropower projects operating on Himachal’s land. The move is being seen as a possible precursor to increased electricity tariffs, which could directly impact consumers across the state.
He argued that small hill states like Himachal have suffered under the GST regime, while larger states have benefited. The Chief Minister also challenged BJP MP Anurag Thakur to clarify his stand on the RDG issue, asking whether he supports or opposes its discontinuation.
“RDG is Lifeline for Himachal”
Highlighting the state’s geographical constraints, Sukhu said that 68 percent of Himachal’s land area falls under forests, with five major rivers flowing through the state. “Placing Himachal in the same category as plain states is unjust. RDG is the lifeline for a hill state like ours. Its withdrawal will directly impact the economy,” he added.
With the Cabinet and all-party MLA meeting scheduled for February 8, political tensions are expected to rise further as the government explores options — including potential hikes in electricity charges — to offset the financial blow.
