Chief Minister Sukhvinder Singh Sukhu on Thursday called for revising the Disaster Risk Index (DRI) prepared by the 15th Finance Commission. He said the Himalayan region cannot be compared with the rest of the country because its hazard risks and their weightages are very different.
Sukhu met the Chairman of the 16th Finance Commission, Arvind Panagariya, in New Delhi and discussed issues related to Himachal Pradesh’s fiscal health. He said the state has been hit hard by natural disasters over the last three years, causing the loss of many lives and damage worth more than ₹15,000 crore.
He said in a statement that the uniform matrix does not cover hazards such as landslides, snow avalanches, cloudbursts, forest fires, and Glacial Lake Outburst Floods (GLOFs). The recent rise in these hazards, which heavily affect the mountainous region, highlights this gap.
He said that due to a low Disaster Risk Index (DRI), Himachal Pradesh did not receive sufficient funds from the 15th Finance Commission for disaster relief, even though the state has been hit by disasters severely.
The Chief Minister requested that a separate Development Resource Index (DRI) be prepared for hill states, taking into account their unique challenges. He suggested that a separate allocation be made for these states, which could then be distributed among them based on the new DRI.
Sukhu also asked for the Revenue Deficit Grant (RDG) to continue for revenue-deficit states like Himachal Pradesh. He said the justification for the continuation and the amount of RDG has been detailed in both the additional and main memorandums submitted to the Finance Commission.
He urged that the RDG should not be tapered, and instead should be determined based on realistic projections of the state’s revenue and expenditure during the award period of the 16th Finance Commission. Sukhu recommended that the RDG should be maintained at a minimum of Rs 10,000 crore annually.
The Chief Minister highlighted that the Supreme Court in July 2025 observed that revenue should not be earned at the cost of the environment and ecology, as this could harm the state. Himachal Pradesh has limited scope to increase revenue because over 67 per cent of its area is forest land, and essential public services must be maintained as part of constitutional obligations.
Sukhu said the state has submitted detailed justification for increasing the weightage of forest and ecological criteria. He requested that snow-covered and cold desert areas above the tree line, along with very dense and moderately dense forests, be included due to their ecological importance.
He also proposed the creation of a ‘Green Fund’ with an annual allocation of Rs 50,000 crore for hill states, to compensate for the ecological services they provide. This fund could be set up as part of Special Central Assistance to States for Capital Investment (SASCI). The matter has been discussed with the Prime Minister and through an official letter.
Since the 16th Finance Commission is finalising its report, the Chief Minister requested that the state’s submissions be considered sympathetically to ensure financial sustainability. He assured the Chairman that the state would continue moving towards fiscal prudence.
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