State assembly’s budget session started on Monday
The session will debate centre’s move to stop RDG for cash-strapped Himachal
Sukhu says it’s a grave injustice with Special category Himalayan state which needs central funding as ‘a right’ to sustain economy
In the backdrop of deepening fiscal and political confrontation over the Revenue Deficit Grant (RDG), Governor Shiv Pratap Shukla delivered one of the shortest customary addresses at the state assembly’s budget session, skipping the prepared text, which he wrapped up in a 51-page speech in barely three minutes.
The budget session of the assembly, which he had convened in Shimla, began on Monday to debate how the Centre’s decision to stop the RDG is going to hit the state’s hill economy and make it difficult to sustain development, infrastructure growth, and fund welfare measures.
The Governor, who was warmly received by Speaker Kuldeep Singh Pathania, Chief Minister Sukhwinder Singh Sukhu, and Leader of Opposition Jairam Thakur on his arrival, went up to deliver his address.
He warmly greeted the MLAs and extended his best wishes for productive proceedings. He expressed hope that members of the House will uphold the established tradition of constructive and informed deliberation on the policies and programs of the government.
However, soon after he began, the governor informed the House that he would not read paragraphs 3 to 16 of the prepared text, as these portions pertained to references to a constitutional body and related issues.
Quickly later, Shukla also said that the subsequent paragraphs detailing the achievements of "my government" were matters for debate among members. This left the members and media galleries stunned as he declined to make any further reference to the text.
“I don’t think I should read it," Shukla said, also adding that he had carefully reviewed the text and the assembly should rather focus its deliberations on the portions of the text relating to the government’s achievements and its future roadmaps.
“I am sure the House will deliberate on this," he summed up.
The portions of the speech, the paragraphs, which he particularly decided to skip, had critical references to the recommendations of the 16th Finance Commission to discontinue RDG for small states like Himachal Pradesh.
His “unread” address had emphasised that, in border states in the Himalayan region, there is no greater scope for revenue generation because of their mountainous terrain and tough topography; the centre has a pivotal role in sustaining the state. It’s RDG, which accounts for 12 per cent of the budget and helps the government implement development projects, social welfare schemes, and disaster management programs.
The address also mentioned that Article 275(1) of the Constitution provides for giving grants to the states that are unable to bridge the gap between revenue and expenditure. Historically, from the first Finance Commission in 1952 through the 15th FC (2020-25), Himachal Pradesh had consistently received RDG. The state had got Rs 48,630 crore for 2020–21 to 2025–26, which is now abolished.
This is the first time the governor has chosen to deviate from the custom of reading the full text of the approved speech, citing grounds that references made to the constitutional body should have been avoided, thus reflecting that the crisis of confidence and trust between the state and the centre over the RDG issue has already widened the rift.
The address noted that while the share in Central Taxes and certain grants has increased, the grant for urban local bodies has been reduced from Rs 855 crore to Rs 435 crore. The net assessed deficit in nominal terms has been estimated at Rs 33,195 crore, substantially higher in real terms. No recommendation has been made regarding savings from the discontinuation of RDG, earlier amounting to Rs 2,94,514 crore.
The withdrawal is expected to adversely affect the state's finances. The discontinuation of the RDG may constrain development programs, welfare schemes, and disaster management efforts, though the State has taken steps to strengthen fiscal discipline and raise additional resources.
However, later Chief Minister Sukhu tried to downplay the governor’s move, stating it was “not an exception” and that governors have skipped addresses in the past. However, he asserted that the issue that had been raised about the RDG is not about the government but the state, as the RDG states its right, and the centre should protect the state’s rights.
He also ridiculed the BJP stand, saying that RDG has been stopped for 17 states, not Himachal Pradesh alone. “Himachal cannot be compared to those 17 states. They have big projects and different economies. Natural resources and geographical constraints inherently limit revenue generation in Himachal, a hill state, he added.
As the House is expected to hold a debate on the RDG in the next three days, the tone of the session being stormy one seems to have already been set with today's development.
Earlier, the Governor had declined the state government's request to convene a special session on the RDG issue alone, and he instead summoned the regular budget session of the assembly.
