State projects revenue loss of over Rs 5,000 crore since April 2014
SHILLONG: The slump in the economic activity owing to the ban on rat-hole coal mining by NGT has led to an increase in crime rate in many of the affected areas.
This was the observation made by the state government in its memorandum submitted to the 15th Finance Commission on Tuesday.
According to the state government, besides the ban directly and indirectly affecting the revenue, it has also brought out law and order problem in terms of growing crime rate.
The government, while seeking funds from the finance panel, said it would like to initiate rehabilitation measures to shift the people affected to other industries like tourism and horticulture.
“Therefore, funds would be needed for skill training geared towards reemployment of these people”, it said.
Additionally, resources are required to rehabilitate and rejuvenate the degraded mines and areas around them so that alternate sources of livelihood like agriculture and tourism can be developed around them.
The government said the ban has upset the livelihood of many families in the coal mining areas whose sole employment depends on this sector.
“These include labourers who worked in the mines, truck drivers transporting coal, people maintaining accounts and individuals working in other related occupations”, the government said.
The ban since April 2014 has severely affected the revenue generation and fiscal capacity of the state in the form of royalty collection, VAT and sales tax, it said, adding since coal mining is a major economic activity in the state with significant backward and forward linkages, the ban has had a tremendous economic impact on trade and therefore private constructions and other development projects have been adversely affected resulting in fall in aggregate demand.
The government said in 2014-15, it had estimated that the total annual loss due to the ban was Rs 600 crore, and if 7.23 % annual growth rate is applied on the figure of Rs 600 crore in 2014-15, the projected loss of government was to the tune of Rs 3,717 crore during the 14th Finance Commission period and will be to the tune of Rs 5,271 crore during the period from 2020-21 to 2024-25.
If only 5% inflation rate is applied on Rs 600 crore, the estimated loss will be Rs 3,481 crore during the 14th Finance Commission period and Rs 4,443 crore during the 15th Finance Commission period.
The state was not compensated for this loss during the 14th Finance Commission and this has substantially reduced the fiscal space available to the state for making critical investments for sustainable development and growth, the government said.
