Dehradun : CM Dhami requested for appropriate compensation in accordance with the spirit of “Environmental Federalism” in view of the “Eco Service Cost” of Uttarakhand

Dehradun: Chief Minister Pushkar Singh Dhami, in a meeting with the Chairman of the 16th Finance Commission Dr. Arvind Panagariya and other members at the Secretariat on Monday, presented the state’s stand in detail on the financial conditions, challenges and development needs of the state. The Chief Minister has requested for appropriate compensation in accordance with the spirit of “Environmental Federalism” in view of the “Eco Service Cost” of Uttarakhand. Along with this, he suggested increasing the weight prescribed for forest cover in “Tax-Transfer” by 20 percent. Special grants should also be considered for proper management and conservation of forests in the state. In a meeting held at the Secretariat, the Chief Minister welcomed the Chairman of the Finance Commission Dr. Arvind Panagariya, Commission members  Anne George Mathew, Dr. Manoj Panda, Dr. Soumya Kanti Ghosh, Secretary Ritwik Pandey, Joint Secretary. K.K. Mishra present in the special meeting organized with the aim of establishing better financial coordination between the Central Government and the states, on their arrival in Devbhoomi Uttarakhand in this silver jubilee year of the establishment of the state of Uttarakhand. The Chief Minister said that in the last 25 years, Uttarakhand has made remarkable progress in the field of financial management like other areas. After the establishment of the state, the state had to depend on external loans to develop its basic infrastructure. While on the one hand the state has achieved remarkable achievements on the basis of various parameters of development, the size of the budget has crossed one lakh crore rupees. In the SDG Index Report of the year 2023-24 released by NITI Aayog, Uttarakhand has emerged as the leading state of the country among the states achieving the goals of sustainable development. The unemployment rate of the state has come down by a record 4.4 percent. In terms of per capita income, an increase of 11.33 percent has been registered, which is more than the national average.

The Chief Minister said that since more than 70 percent of the total geographical area of ​​the state is covered with forests, two major challenges have to be faced. On the one hand, more expenditure has to be made for the conservation of forests, on the other hand, due to the prohibition of any other development activity in the forest area, the “eco service cost” also has to be borne. The Chief Minister requested for appropriate compensation in accordance with the spirit of “Environmental Federalism”, increase of the weight prescribed for forest cover in “Tax-Transfer” by 20 percent and special grant for proper management and conservation of forests in the state. After the end of the “Industrial Concessional Package” in the year 2010, we are facing difficulty in compensating for the “locational disadvantage”. Due to difficult geographical conditions and other practical difficulties, the participation of private sector in important sectors like education and health in the hilly areas of the state is very limited. Due to this, special budget provisions have to be made for these sectors. Efforts are being made to provide quality education at low cost through smart classes, cluster schools and distance education. Along with this, efforts are also being made to strengthen health services in the state by ensuring the availability of tele medicine, special ambulance service and specialist doctors.

The Chief Minister said that along with tax effort, ‘fiscal discipline’ should also be included as a component in the ‘devolution’ formula in the norms of sharing between the states under ‘tax-devolution’. It would be logical to implement ‘revenue need grant’ instead of ‘revenue deficit grant’. The Chief Minister said that due to the three dimensionality of the geographical structure of the state, both capital expenditure and maintenance cost are high. The credit-deposit ratio in the state is also low. Dr. Arvind Panagariya, Chairman of the 16th Finance Commission, said that the state of Uttarakhand is developing rapidly in every field. The per capita income of the state has increased. Good work is also being done in the state towards reducing unemployment. He said that in view of the adverse geographical conditions, discussions will be held on a wide scale to find solutions to the challenges that Uttarakhand and other hill states are facing. He said that the 16th Finance Commission has set a target to provide its report to the Central Government by 31 October 2025. On this occasion, Finance Secretary Dilip Javalkar made a detailed presentation on various challenges of the state. Chief Secretary Anand Bardhan, Principal Secretary R.K. Sudhanshu, Shri L. Fanai, R. Meenakshi Sundaram, Secretaries and Additional Secretaries were present in the meeting.