Itanagar: The 14th Finance Commission Chairman Dr. Y V Reddy said that the Commission has keenly noted the issues and challenges highlighted by the state government and the demand for special dispensation for addressing the development needs of the border state.
Speaking at a meeting of the 14th Finance Commission with the state government here on Tuesday, Reddy commended the goal of Vision-2020 envisaged by the state government focusing on key sectors viz. Education, Power, Tourism, Agriculture and allied sectors, an official release said on Wednesday.
He observed that the huge responsibilities shouldered by the state government in terms of being main employer due to lack of other economic activities in the state, its border status affecting access to external funding, short working season affecting timely implementation and progress of development projects, the scattered population and cost of conservation of forest resources, the sizable forest coverage and its contribution to the country and the loss of revenue due to Supreme Court ban on timber operations, connectivity and other issues.
The chairman said that despite all these challenges the progress is being sustained. He further said the Commission has also noted the request for significant increase in grant devolution and state specific needs.
Earlier, Chief Minister Nabam Tuki projected a total proposal of Rs. 85001.16 crores as grant in a memorandum, pleaded the Commission for special recommendation for a fiscal stimulus package for the state in tiding over the fiscal challenges because of the gap in the non-plan revenue deficit grant recommended by the 13th Finance Commission and the actual expenditure, which is an inheritance from the UT days.
As a major chunk of non-plan expenditure is on salary and wages, Tuki apprised that the implementation of the 6th Central Pay Commission package to the state government employees along with arrears, enhanced DA installments, up-gradation of all ‘group-D and group-C’ and MACP Scheme for all employees contributed to the enhanced salary bill.
‘The actual gap for the 13th Finance Commission period is estimated to about Rs. 6799 crore during 2010-11 to 2014-15 (13th Finance Commission award period).
Seeking for the continued support of the 14th Finance Commission for accelerating the pace of development in the hilly state, the Chief Minister informed that as per the CAG report on state and Union Finances for 2011-12, the state’s per capita expenditure on social services, health, education, agriculture, transport and rural development has been rated as one of the highest in the country.
Tuki also informed that concerted efforts are being made in various areas for improving the fiscal position of the state through fiscal discipline measures, steps to increase the tax and non-tax revenue of the state, institutional reforms.
The tax revenue has grown from Rs 98 crore in 2007-08 to Rs 442 crore in 2013-14, registering a growth of 220 per cent. “As envisaged by the 13th Finance Commission, to carry forward fiscal consolidation, the state of Arunachal Pradesh passed the Fiscal Responsibility and Budget Management (FRBM) Act in 2006 and the amended in 2012,” he added.
“Because of its poor resource base, being a special category state, my state is soley dependant on Central Assistance for Plan Investments,” he said.
The CM further said constraints like lack of private investments, a weak market economy, inadequate infrastructure and poor physical connectivity were factors which constrain the generation and augmentation of state’s own resources, further aggravated by Supreme Court ban on timber operation and suspension of coal mining.(UNI)
