Himachal CM for generation tax on hydro

Shimla: In the absence of any tax for environmental services rendered by conserving precious Himalayan forest green cover, chief minister Prem Kumar Dhumal has sought finance minister Pranab Mukherjee’s intervention for imposition of a generation tax on hydropower.

Dhumal, in a letter, has drawn the attention of the finance minister to a proposal made in the 1984-85 budget when Mukherjee as finance minister had withdrawn 2 paisa electricity duty that was imposed in 1978 and had supported imposing generation tax on hydro power for augmenting resources in hilly states.

“You had supported the legitimate claim of small states, which are rich in hydel potential, for levying tax on generation under article 288(2) of the Constitution of India, he said.

Dhumal has pointed out that the Rangarajan committee had acceded to the demand of Himachal Pradesh and specifically recommended imposition of Generation Tax over the hydel potential available for power generation in the State. The report has been accepted by the Planning Commission he says.

A suo motto ban on felling of forests had deprived the state of substantial revenue even though the state possess forest wealth worth Rs 1.50 lakh crores and Himachal needs to be adequately compensated for conserving its ecology, he said.

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