Himachal Chief Minister Jai Ram Thakur on Wednesday urged the Finance Commission for fair assessment of the component of revenue receipts and expenditure by keeping in view the topographical conditions and also recognise cost and climate disadvantages of the State.
Addressing a meeting with the 15th Finance Commission here, the Chief Minister said the topography of the State was difficult and construction and maintenance cost of capital assets like roads, health and educational institutions, irrigation and water supply schemes and electrification was very high. He said that requirement of public institutions in the hills was higher as compared to plains.
He said that all India average was one health Sub Centre for four villages covering 5624 population whereas in the State one Health Sub Centre is for ten villages covering population of only 2987. He said that about 87 percent farmers were small and marginal and only 20.5 percent net area of the State was irrigated as compared to the national average of 46 percent.
Thakur said that Himachal Pradesh was a revenue deficit State and it has to depend on loans to fund development works. He said the share of Central Taxes was inadequate to wipe out the pre devolution deficit of our revenue deficit state. He urged the Commission to recommend adequate grants so that not only the Post Devolution Revenue Deficit was neutralised, but also leaves the State with adequate Revenue surplus to fund a part of the Capital Expenditure on infrastructure development.
He also urged the Commission for assisting the state in tackling the monkey menace in the State adding that it had forced the farmers to stop cultivation of crops, which has adversely affected the economy.
Chairman 15th Finance Commission N.K Singh assured that the Commission would sympathetically consider various issues raised by the State Government while allocating funds for the State. Other members of the Commission also participated in the discussions.
Addressing a press conference after the meeting, N K Singh said Himachal Pradesh has made credible progress in adhering to the macro-economic parameters, however, Debt to GSDP ratio which is unacceptably high at 38% is an area of continuing concern.
The Chairman of the Finance Commission nonetheless appreciated state govt’s efforts to bring it down form an unusually high debt level in past few years. State govt is conscious of it and would do suitable amendments in its FRBM Act for further fiscal consolidation.
He said Himachal Pradesh needs to find innovative ways to increase the tax base and the collection. However, Singh acknowledged that there are issues with GST like rates and the compensation which may take some time to settle. "Commission will try to make realistic GST projections for states from 2020-2025 considering that 14% compensation will not be there for states in the last three years of award period of this commission. It will also be a challenge to make revenue projections from GST for centre," he added.
The 15th Finance Commission which is on a 3 day visit to Himachal Pradesh also sought views of the representatives from various political parties, local bodies and trade and industry. Industrial package on the line of north east States was demanded in these meetings.