Rio seeks continuation of revenue deficit grants for IHR

Rio seeks continuation of revenue deficit grants for IHR
Rio speaking at the IHR states conclave at Mussoorie, Sunday.
DIMAPUR, JUL 28 (NPN) | Publish Date: 7/28/2019 11:19:13 AM IST

Highlighting the challenges faced by the mountainous and hilly Himalayan States of the country due to its topography, harsh terrain and a number of other factors that contribute to development disability, Nagaland chief minister Neiphiu Rio urged the Centre and the 15th Finance Commission to take these aspects into consideration while allocating funds to these States.

Speaking at the Conclave of Indian Himalayan Region (IHR) States hosted by the Government of Uttarakhand at Mussoorie on Sunday in the presence of Union finance minister Nirmala Sitharaman, 15th Finance Commission chairman NK Singh, NITI Aayog vice-chairman Dr Rajiv Kumar and other chief ministers from IHR States and Central government officials, Rio reminded everyone that the hilly and mountainous States of the country were sentinels at the country’s borders with Pakistan, China, Myanmar and Bangladesh, all of whom posed military and demographic security threats to the country, especially to the IHR States themselves. 

Pointing out that all Himalayan States also provided innumerable eco-system services to the nation like climate regulation, carbon sequestration etc, he stressed that they should be given special attention.

Sharing his views on the devolution principles of the Finance Commission, Rio supported the proposal for increase of share of taxes of States from 42% to 50%, but added that in the context of Nagaland, even with this increase, the State would still remain revenue deficit. 

“In fact, it will only result in a corresponding reduction in revenue deficit grant. Since the share of taxes tends to vary depending on actual collections, we have the apprehension that our receipts may fall below estimates even more than what it is now. 

My State has experienced negative receipts every year of the 14th Finance Commission period,” he emphasised.

Since States like Nagaland that were generally revenue deficit would not benefit from an increased share of taxes, Rio said more benefit would accrue if the commission agreed to fully cover the revenue deficit and also provided funds for critical infrastructure needs so that the infrastructure and developmental deficit that were being facing were effectively addressed.

The chief minister recounted how the manufacturing sector in the State was contributing a substantial amount of Rs. 14,123 lakh to the State’s economy, comprising 6.09% of the GSDP till 1997-98. 

This suddenly dropped to Rs. 6,402 lakh in 1998-99 and then to Rs. 3,362 lakh in 1999-2000, shrinking to 1.32% of the GSDP. This had been attributed to the judgement of Supreme Court in WP (Civil) 202, dated December 12, 1996 in TN Godavarman Vs Union of India and Others against felling of trees in the Northeast. 

The manufacturing sector that was somehow emerging in the form of saw mills, plywood and veneer mills and furniture-making could never make a comeback and till today the manufacturing sector in the State hardly added about 1% to the State’s economy, Rio explained.

“This is the price paid by the State for the sustenance of forest cover at the behest of the nation. It has, however, never been accounted for, or compensated by any of the finance commissions or the Government of India. Conservation and preservation of the ecosystem is not without cost and this cost can only be understood the people who pay the price. Their voices have to be heard with patience and understanding and appropriately redressed,” he added.

Rio further suggested that as the conclave was being held on the common uniting ground that the participating States fall under the Indian Himalayan region, it would be more appropriate to replace the phrase “Special Category States” with “Indian Himalayan Region States” from the proposed joint memorandum to the 15th Finance Commission with appeals for consideration of the problems and issues faced by IHR States on the basis of being hilly and mountainous States and their contributions to the country’s ecology, environment and forest cover and for being international border sentinels border of the country.


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