Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu has informed the state Assembly of a significant delay in releasing key funds, directly attributing the state's severe financial crunch to a steep reduction in central grants. The announcement means legislators will have to wait for crucial development money and their own revised salaries.
Central Grant Slashed, State Coffers Empty
Responding to queries from Leader of Opposition Jai Ram Thakur during the Zero Hour on Monday, Chief Minister Sukhu detailed a dramatic cut in financial support from the central government. He revealed that the annual Revenue Deficit Grant (RDG) has been reduced from approximately Rs 11,000 crore during the previous government's tenure to a mere Rs 3,200 crore for the 2025-26 financial year.
This drastic reduction has left the state struggling to manage even routine expenditures. Sukhu stated that the government has been forced to impose cuts on multiple development funds as a consequence. The financial strain is so acute that the disbursement of the third instalment under the Vidhayak Ksetra Vikas Nidhi Yojana (VKVNY) has been postponed.
Double Blow: OPS Restoration and Borrowing Limits
The Chief Minister outlined a second major pressure point on the state's finances. He explained that the central government has restricted Himachal Pradesh's borrowing capacity following the state's decision to restore the Old Pension Scheme (OPS). This move has further tightened the fiscal space available to the government.
Sukhu informed the House that he has urged the Union Finance Minister to allow a 2 per cent increase in the state's borrowing limit and plans to reiterate this request. However, he expressed little hope for relief from the 16th Finance Commission, citing that the state's per capita income has been shown as increased.
Impact on MLAs and Public Perception
The delay in VKVNY funds has drawn criticism from the opposition. Jai Ram Thakur highlighted that the government's failure to release funds is exposing MLAs to public criticism in their constituencies. He cited his own constituency, Seraj, where only Rs 24 lakh has been released so far, creating a situation where elected representatives face public ire.
Furthermore, the Chief Minister clarified that the government is currently unable to release the revised salaries and allowances for MLAs, even though the relevant amendment bill was passed in the monsoon session earlier this year. He indicated that these revised emoluments are unlikely to be disbursed for the "next couple of months." Sukhu expressed hope that the next instalment of the Vidhayak Nidhi could be released by January, depending on the state's revenue position.
Recognition for Athletes Assured
During the discussion, Thakur also raised the issue of state recognition for athletes, noting that five women kabaddi players from Himachal have been selected for the 2025 Women's Kabaddi World Cup without any announcement of incentives. In response, CM Sukhu assured the Assembly that the players would receive "appropriate awards," citing the precedent of the government giving Rs 33 lakh per player during a previous South Asian tournament.
The situation underscores the precarious financial position of Himachal Pradesh, with the state government pointing to reduced central support and borrowing constraints as the primary causes for delays in development funding and legislative entitlements.
