Shimla: Earlier today, Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu announced that he and cabinet ministers along with chief parliamentary secretaries, and heads of boards of corporations will not take their respective salaries for two months due to what he cited as the “grim financial condition” of the state.
The chief minister announced this in the Legislative Assembly as he urged other MLAs also to follow suit to help improve the finances. He added that the government is taking measures to increase revenue and slash unproductive expenditure but that would take some time to yield results.
Why is Himachal Pradesh facing financial crisis?
Expressing concern over the state’s precarious financial situation, Chief Minister Sukhu highlighted that the Revenue Deficit Grant (RDG) for 2023-24 was originally set at Rs 8,058 crore but has been reduced by Rs 1,800 crore to Rs 6,258 crore for the current financial year.
“In 2025-26, the revenue deficit grant will be reduced by another Rs 3,000 crore to just Rs 3,257 crore, making it even more challenging for us to meet our needs,” he added. Sukhu also pointed out that no funds have been released from the Centre against the Rs 9,042 crore Post-Disaster Need Assessment (PDNA) for damage to roads, bridges, and infrastructure during the 2023 monsoon.
He further noted that the Rs 9,200 crore deducted from employees under the National Pension Scheme (NPS) has not yet been refunded by the Centre, despite repeated appeals from the state government.
Additionally, Sukhu mentioned that the compensation for GST from the Centre, which was halted in June 2022, has reduced the state’s revenue by Rs 2,500-3,000 crore annually. Moreover, the state’s borrowing limit has been reduced by Rs 2,000 crore following the restoration of the Old Pension Scheme (OPS).