Shimla, Feb 3
The 15th Finance Commission has recommended Himachal Pradesh to improve its GST collection, revenues and road network. Also the report has raised concern about the financial position and poverty in the state. Besides concerns the report also appreciated the state for its work health, education, water, sanitation and tourism.
Grant-in-aid detailed
The finance commission has granted a fixed total allocation of Rs 81,977 crore for coming five years (include state’s share in central taxes & duties tune to Rs 35,064 Cr and total grants-in-aid worth Rs 46,913 Cr). This was stated by the Finance Minister Nirmala Sitaraman while laying the report of 15th FC in the parliament along with the Years 2021-22 annual budget on Feb 1. The state grants-in-aid (include, among other things, a post devolution revenue deficit grant) was fixed to Rs 37,199 Cr. The grant to local self Government(s) Rs 3,049 Cr and Rs 2,258 Cr for disaster management. The FC allocations also include Rs 2,222 Cr under the PMGSY to connect about 7,628 census villages located in difficult terrain of the state with road connectivity.
Recommendations for improvement
“The state has not done well in terms of GST collections. It needs to find innovative ways to
increase both its own tax revenue (OTR) and non-tax revenue (ONTR),” said the report. It added that the state also “needs to take measures to restructure and rationalise its spends by reducing the burden of committed expenditure”.
increase both its own tax revenue (OTR) and non-tax revenue (ONTR),” said the report. It added that the state also “needs to take measures to restructure and rationalise its spends by reducing the burden of committed expenditure”.
The report cautioned the state to improve its financial mess. It report reads the State has a high debt to GSDP ratio which needs to be consolidated in line with the new FRBM Act and other recommendations made by the Commission.
Also Flagging out the state’s poverty situation, the report said that eight per cent of the Himachal population lives under poverty line.
The commission emphasised that roads are lifeline for the people of the state. However the state has lower road density vis-a vis National average. The government should focus on the land connectivity keeping in mind the negligible scope for railways and inland water transport in this hill terrain state, it stated. Inadequate road transport network leads to heavy head-load cost of providing public services, informed the FC report.
Appreciation earned
FC report also appreciated that state’s annual per capita revenue expenditure on health and education is much higher than the National Health Education Standards (NEHS) averages. The report further stated that indicators related to education, health, water and sanitation are better for Himachal than the National average, and the state was the second in the country to be declared open-defecation free.
The report also observed that state has enhanced its gross state domestic product (GSDP) by boosting tourism with measures like improving the air connectivity, developing new offbeat hill-stations, starting heli-taxi services to remote hill-stations, encouraging eco-tourism and adventure sports and promoting homestays as a viable alternate source of income for the people.
