Budget planning: HP pins its hopes on larger share in Central taxes

The state’s plan for the current financial year has been pegged at Rs 2,700 crore,about 12.50 per cent higher than 2008-2009,while the proposed plan size for 2010-11 (expected to be finalised next month after discussions with the Planning Commission) is around Rs 3,000 crore.

Even though the state government’s resource base has increased significantly after imposition of the Value Added Tax (VAT),which brings in about Rs 1,500 crore annually,and increasing sale of power (Rs 1,150 crore),Himachal Pradesh continues to pin its hopes on its share of central taxes.

Already a resource-deficit state,the implementation of the Sixth Pay Commission report in the current financial year has pushed HP into a serious crisis. In fact,the state has already sought a package from the 13th Finance Commission in order to meet the burden of payment of revised wages to employees. The Finance Commission,headed by Vijay Kelkar,has already submitted its report to the President,which is expected to be made public by end of February.

“We are expecting favourable recommendations from the 13th Finance Commission,including a higher share of central taxes to the state,changes in devolution of funding patterns,payments for environmental services,a suitable compensation for surrendering its revenue from forests and other incentives for fiscal reforms,” said Dhumal.

In its budget,the state has been giving priority to the social sector,having earmarked Rs 872 crore (32.30 per cent of the plan funding) for it. HP’s initiatives on environment protection have already attracted the attention and appreciation of national and international organisations.

Officials of the state’s Planning and Finance department say the discussion at the impending meet will basically be directed to know the MLAs’ priorities in terms of development,infrastructure-building and boosting tourism and hydro-power generation besides employment-generation schemes.