Too early to comment on green bonus: 16th finance panel holds talks with Himachal Pradesh Govt

Pratibha Chauhan

Shimla, June 24

Arvind Panagariya, Chairman of the 16th Finance Commission, along with its members today held detailed consultations with the state government on the grants to be given to the hill state. “Issues like the grant of green bonus or funds to mitigate the impact of climate change are all within the purview of the Finance Commission but it is too early to comment as to what will be the approach of the Finance Commission. Himachal’s needs cannot be viewed in isolation,” he said.

Himachal is optimistic of a favourable recommendation from the 16th Finance Commission, based on its record of environmental protection. The debt burden of Himachal has already crossed Rs 80,000 crore with very limited avenues of revenue generation. As such, Himachal is hoping to get a quantum jump in the Rs 81,977 crore recommendation made by the 15th Finance Commission in February 2021.

Panagariya said that detailed consultations were held with Chief Minister Sukhvinder Singh Sukhu and the Principal Secretary (Finance) made a presentation on the financial needs of the state for the period from 2026 to 2031,” he added. The government raised the issue of the disaster relief index of the 15th Finance Commission not properly capturing its needs.

He said that it would be pre-mature and inappropriate to comment on the parameters that would be adopted for recommending an allocation of grants “as Himachal’s needs cannot be viewed in isolation”. “The total tax revenues of the Centre will be shared with all states,” he added.

On a question regarding possible discrimination with Himachal along political lines, Panagariya said, “The Finance Commission is traditionally a low-profile and neutral body. It has a long tradition since 1952 and all Finance Commissions had worked professionally and we will maintain that tradition.” Himachal’s share could not be seen in isolation as there were 28 states and all had to be seen in entirety and “we have been given time till October 2025 to do so,” he added.

He said that the commission was aware that Himachal had difficult terrain and geographical constraints, resulting in the cost of roads, airports, medical colleges, schools or colleges being much higher than in the plains.

Panagariya lauded the achievements of the state, especially in the education and health sectors.

The Chief Minister urged the 16th Finance Commission to recommend liberal financial assistance for the development of the state keeping in view its tough geographical conditions and its contribution to the nation. A detailed presentation was made to the 16th Finance Commission on the financial needs of the state and its various important issues. Sukhu emphasised that it was necessary to develop the border areas of the state to ensure national security and provide basic facilities to people to check their exodus.

Sukhu said the state was prone to natural disasters and it should be given special preference for disaster management and relief and the disaster risk index should be made on the basis of possible disasters in the state and all other Himalayan region states.

Leader of the Opposition Jai Ram Thakur also sought special financial assistance to the state in view of its geographical and economic conditions. At the meeting with the Finance Commission, he advocated for special grants to the state to speed up development works and improve road connectivity.

Thakur said that tourism was the backbone of the state’s economy. “Air connectivity will give a boost to tourism. To improve air connectivity, Rs 1,000 crore was given for the construction of the greenfield airport in Mandi and Rs 400 crore for the expansion of the Kangra Airport. More funds should be provided for both airports,” he added.

Complete ban on felling of trees, revenue losses suffered

• The Chief Minister informed the Finance Commission that the Central Government was yet to release Rs 9,042 crore to the state for huge losses it had sustained due to heavy rains and flashfloods during the monsoon season last year
• He said that the state had been contributing immensely to maintaining the green cover of the Himalayan region, suffering revenue losses in the process to the tune of thousands of crores without any compensation
• He said in the larger interest of the country, the state government had imposed a complete ban on the felling of trees though it could earn a revenue of thousands of crores by cutting trees
• Sukhu said that the state had provided lakhs of acres of fertile land for major projects like the Bhakra Dam, Pong Dam and also provided water for irrigation purpose to Haryana, Punjab and Rajasthan and electricity for various industries
• The state has not got any financial assistance for this contribution nor has it got the possession of the Shanan power project, the lease period of which has elapsed, he added