By Our Staff Reporter
Dehradun, 19 May: In a meeting with 16th Finance Commission Chairman Arvind Panagariya and other commission members at the Secretariat here, today, Chief Minister Pushkar Singh Dhami presented before them Uttarakhand’s financial challenges and developmental needs. During the meeting, he sought compensation for the state’s “eco-service costs” under the principles of “environmental federalism” and advocated increasing the weightage of forest cover in tax devolution to 20 percent. Dhami also sought special grants for the management and conservation of the state’s forests.
Welcoming Panagariya and commission members Anne George Mathew, Manoj Panda, Soumya Kanti Ghosh, Secretary Ritwik Pandey, and Joint Secretary KK Mishra to Uttarakhand, Dhami stressed upon the need for strengthened financial coordination between the central government and the states.
Dhami highlighted Uttarakhand’s progress in financial management over the past 25 years, noting its initial dependence on external loans for infrastructure development post-state formation. He also cited various achievements of the state, including a budget exceeding Rs 1 lakh crores and recognition in NITI Aayog’s 2023-24 SDG Index report, which recorded a 4.4 percent drop in unemployment and an 11.33 percent rise in per capita income, surpassing the national average.
The CM also listed before the Commission the challenges posed by Uttarakhand’s 70 percent forest cover, requesting compensation for eco-service costs, an increased weightage in tax devolution, and special grants for forest conservation. Dhami also addressed the impact of the 2010 termination of the Industrial Concessional Package, which he said created a locational disadvantage for the state. Dhami further urged the Finance Commission for special budgetary provisions for education and healthcare in the hill regions, while also highlighting the efforts made toward smart classes, cluster schools, telemedicine, specialised ambulance services, and improved doctor availability.
Citing Uttarakhand’s vulnerability to natural disasters, Dhami urged sustained financial support from the Centre for disaster management and rehabilitation. He also sought special grants for water conservation initiatives such as the “SAARA” programme and “Bhagirathi App”.
Regarding limitations in hydropower utilisation due to the Ganga’s designation as a national river, Dhami requested compensation for affected projects and an appropriate mechanism to address revenue and employment losses. He also advocated special assistance for infrastructure development catering to the large influx of pilgrims, given the state’s difficult terrain and high construction costs.
The CM also proposed the inclusion of “fiscal discipline” in the devolution formula alongside tax efforts and recommended replacing the revenue deficit grant with a revenue need grant. He further emphasised on the higher capital and maintenance costs associated with Uttarakhand’s geographical structure and low credit-deposit ratio.
During the meeting, Panagariya acknowledged Uttarakhand’s rapid development, including increased per capita income and unemployment reduction. He assured that the unique challenges faced by Uttarakhand and other mountainous states due to their geography would be thoroughly examined, adding that the commission aims to submit its report to the central government by 31 October 2025.
On this occasion, Finance Secretary Dilip Jawalkar presented a detailed report on the state’s financial challenges. Among those present on the occasion included Chief Secretary Anand Bardhan, Principal Secretaries RK Sudhanshu, L Fanai, R Meenakshi Sundaram, and other officials.
