Chief Minister, Jai Ram Thakur urged the Finance Commission to allocate Rs 800 crore to Himachal Pradesh every year under SDRF (State Disaster Response Fund). He sought fair assessment of the component of revenue receipts and expenditure, keeping in view the topographical conditions and also recognising cost and climate related disadvantages of the state.

He was presenting the state’s case before the 15th Finance Commission. The CM said that 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 5,624 population, whereas, in the State one Health Sub Centre is for ten villages covering population of only 2,987. He said that about 87 per cent farmers were small and marginal and only 20.5 per cent net area of the state was irrigated as compared to the national average of 46 per cent.

Thakur said the average yield per unit area was much less than the national average.

Thakur said that the state of Himachal Pradesh was a revenue deficit state and it has to depend on loans to fund development works. He said that although the state government has been prudent in its borrowings and cash flow management has helped its debt to GSDP ratio, which has declined from 63 per cent in 2007-08 to 35 per cent in 2016-17.

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He said that due to this the state government was left with little resources for investment in social and economic sectors after repaying debt.

The Chief Minister said that 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 said that the State was trying its best to augment its revenues. He said that annual revenue from VAT were Rs. 727 crore in 2005-6, which significantly grew to Rs 4382 crore in 2016-17.

He said that the government had expected tax buoyancy with the introduction of GST.

He said that in the past 14 months the revenue shortfall in GST revenues compared to the estimated revenues has been about 40 percent.

He urged the Commission to look into the matter so that the state could augment its revenue in a better manner.

Thakur said that the state was prone to various hydrometeorological hazards like flood, flash flood, cloudbursts, droughts, forest fire, cold waves, Avalanche etc. He said that the state has suffered losses worth Rs. 1217 crore in monetary terms during the monsoon this year, till 17 September.

He urged the Commission for allocating Rs 800 crore every year under SDRF for meeting a difficult challenge. The Chief Minister said the poor air connectivity in the state is a hurdle in promoting tourism and apprised the Commission of the problems in hydropower generation in Himachal.