RDG Was Never Permanent; States Must Embrace Fiscal Discipline — Shekhawat
Shimla, 8 February 2026:
Union Minister for Culture and Tourism Gajendra Singh Shekhawat on Saturday said that the Revenue Deficit Grant (RDG) was always intended as a temporary and transitional arrangement, and not a permanent entitlement for states. Addressing a press conference in Shimla, he asserted that long-term financial stability can only be achieved through fiscal discipline and structural reforms rather than political confrontation.
Referring to the recommendations of the Sixteenth Finance Commission of India, the Minister said successive Finance Commissions had extended RDG with cautionary observations, particularly during the COVID-19 pandemic, when support was front-loaded at unprecedented levels to help fiscally stressed states recover. He noted that Himachal Pradesh received significantly higher RDG allocations during the 15th Finance Commission period, but with a clear signal that states must strengthen their own revenue mechanisms going forward.
Shekhawat emphasized that fiscal deficit is fundamentally the gap between revenue and expenditure and cannot be resolved through blame-shifting. Instead, he said, states must undertake financial restructuring, improve tax efficiency, and rationalize expenditure. He pointed out that under the revised Finance Commission formula, tax devolution to states has structurally increased, including Himachal’s share, which can help offset the gradual tapering of RDG. He also cautioned that rising debt-to-GDP ratios — with Himachal reportedly crossing 40 percent — should prompt corrective fiscal planning.
Highlighting central support to Himachal Pradesh, the Minister said the Union Government has consistently backed the state’s tourism and infrastructure development. Under the Special Assistance for Capital Infrastructure scheme, Himachal has been approved a 50-year interest-free loan for tourism infrastructure, which he described as virtually grant-like assistance. He added that schemes such as Swadesh Darshan Scheme and PRASAD Scheme, along with challenge-based destination development initiatives, have ensured substantial funding for the state and will continue to do so based on viable project proposals.
On disaster management, Shekhawat said the Centre has significantly enhanced allocations under SDRF and NDRF over the past decade and has permitted expenditure not only on post-disaster relief but also on preventive and mitigation measures. He urged the state government to prioritize long-term resilience planning in view of changing climate patterns.
Addressing concerns surrounding the India–US trade understanding, the Minister stated that core agricultural and dairy sectors remain fully protected. There is no market opening for essential staples such as wheat, rice, pulses, common vegetables, dairy products, or major spices. Accusing the Congress of spreading confusion over apple imports, he clarified that imported apples cannot be sold in India below roughly ₹100 at retail-equivalent cost due to a minimum base price and applicable duties, thereby safeguarding domestic growers.
Concluding, Shekhawat said Budget 2026, coupled with infrastructure expansion, a manufacturing push, MSME support, and balanced trade agreements, will strengthen India’s global economic position while ensuring continued structured support for states like Himachal Pradesh through growth-oriented policies.
