Himachal CM for generation tax on hydropower

Shimla: While emphasizing on the need for harnessing hydro electric potential to sustaining the nations growth, chief minister Prem Kumar Dhumal made a case for levying generation tax on hydropower to provide for additional revenues in a resource deficient state.

Speaking at the finance ministers’ conference at Delhi on macro economic situation and formulation of union budget 2009, Dhumal said that to augment revenues in hilly states, hydropower should be treated as resource on which a generation tax should be allowed.

Seeking liberal financing for special category hilly states on the ground that development process in such regions required more expenditure in comparison to plainer ones, the chief minister sought parity with other special category states for funding schemes like Sarv Shiksha Abhiyan, mid day meal and health insurance cover as Himachal was being treated differently from Jammu & Kashmir and other north eastern states.

He said that Himachal was not getting 90% funding to schemes like Sarv Shiksha Abhiyan, Mid Day Meal Scheme, Health Insurance, which was being given to north eastern states and Jammu and Kashmir.

Adequate budgetary provision for maintenance of national highways in the hill state should be incorporated in the forthcoming budget, he said.

Dhumal also sought central assistance for hilly states to meet additional expenditure arising due to implementation of Sixth Pay Commission.

The chief minister mentioned that bank fund flows were moving from hilly states into industrial states as indicated by existing credit deposit ration which were only 40 to 50 % in hilly states and topped out at 80 to 100 % in industrial ones. “This anomaly was badly impacting economic development,” he said.

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