Shimla: Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu on Tuesday made a strong case for greater financial flexibility from the Centre, arguing that the ₹3,920 crore allocated to the state under the Special Assistance to States for Capital Investment (SASCI) scheme cannot be treated as direct financial relief.
Responding to Opposition criticism in the Assembly, Sukhu clarified that the SASCI allocation consists of interest-free loans that must be repaid to the Centre over 50 years, and therefore cannot substitute for untied grants. His remarks came after Opposition leaders claimed the Centre had extended significant financial support at a time when the state is grappling with fiscal stress following the discontinuation of the Revenue Deficit Grant (RDG).
“I would like to make it clear that every state needs untied grants. Untied grants can be utilised in any government work, schemes and even for salaries, pensions etc. Under tied grants, allotted money only gets utilised for the purpose for which the money was allotted,” Sukhu said in the House.
Leader of Opposition Jai Ram Thakur questioned why the state government had not formally expressed gratitude to the Centre for the SASCI allocation. In response, Sukhu said the government had no hesitation in thanking the Centre, but insisted that the RDG should be reinstated.
“We have no problem in thanking the central government but it should continue our RDG. The Opposition should go along with us to the central government demanding the continuation of the RDG,” he added.
Untied grants, Sukhu emphasised, offer states the flexibility to allocate funds across a range of needs, including salaries, pensions and welfare schemes—unlike tied funds, which are earmarked for specific projects.
Meanwhile, Himachal Pradesh Governor Kavinder Gupta welcomed the SASCI allocation, describing it as a “forward-looking decision” and thanked Prime Minister Narendra Modi for the move. He said the funding reflects the Centre’s commitment to the development of hill states.
Under the 16th Finance Commission framework, the Centre has set up a ₹25,000 crore fund aimed at boosting infrastructure and development in nine hill states. Himachal Pradesh’s share of ₹3,920 crore makes it the second-largest beneficiary under the scheme.
Gupta noted that the funds are expected to accelerate progress in key sectors such as roads, healthcare, education and core infrastructure. He also underlined the importance of the package in addressing the state’s financial constraints, expressing confidence that the funds would be utilised transparently and effectively for the broader welfare of the population.
