Himachal to consider imposition of water tax

Shimla: Defending the budget outlay for 2011-12, chief minister Prem Kumar Dhumal on Friday said that the government was considering imposition of water tax for mopping up additional revenues and plans to appoint the country’s first regulator for education sector.

Summing up the debate in which a record 48 lawmakers participated, Dhumal said that given the financial constraints the state was facing the fiscal deficit had been contained at 2.7 percent.

Making a mention about earlier attempts to impose generation tax on hydropower about which the assembly had even unanimously passed a bill that did not get the presidents assent, the chief minister sought cooperation from the opposition for legislating a law to impose water tax like that has been done by Jammu & Kashmir government. “It would bring in much needed additional revenue,” he said.

Responding to criticism over opening of many private universities, he said that no private university had been provided government land. Having enacted a law for setting up a regulatory commission for education, he said, “a regulator would soon be appointed to ensure that education standards are maintained.”

Dhumal denied congress lawmaker Mukesh Agnihotri’s allegation that the government was tapping phone of political opponents. “No phone of any political person was being tapped and I have even written to the prime minister stating that the state will not allow such an invasion of an individual’s privacy except where it is necessary to catch criminals and terrorists,” he said.

Making a comparison between the previous government and the present one, Dhumal said that whereas the states accumulate debt had increased from Rs 13,209 Cr in 2002-03 to Rs 21,248 Cr by 2007-08 and on 17th March, 2011 it was Rs 24.053 Cr. “During 5 years of the previous congress government the overall debt had increased by Rs 8032 Cr while the increase is only Rs 2812 Cr in 4 years of my government,” he said.

The chief minister pointed out that the previous government budget allocation in 5 years for capital investment was Rs 3852.19 Cr, the present government had allocated Rs 7180.56 Cr, for power sector against Rs 533.54 Cr earlier, the current government had allocated Rs 1479.80 crore of which Rs 456.50 Cr is proposed in the 2011-12 budget and for agriculture the amount has increased from Rs 845 Cr to 1428.12 Cr.

The 2011-12 budget proposal project a Rs 51.05 Cr revenue surplus for the year and the total loans proposed to be raised for meeting budgetary requirements are Rs 1647 Cr.

Holding that power sector was the biggest non-tax resource asset for additional revenues, he acknowledged that some of the big project has fallen behind commissioning schedules. NTPC’s 800 MW Kol Dam project that was expected to go on stream this year is now targeted to be commissioned in 2013, he said.

The government had set up directorate of energy and the task of awarding new projects was being speeded up. The new bidding policy for allotting project had begun to show results as of the 17 projects allocated on Wednesday, the bid winners had aggressively bid for providing more than 20 % free electricity additional to the 12 percent royalty the state is entitled to, said Dhumal.

Expressing his opposition to the 13th Finance Commission for capping of expenditure on salaries at 35 %, the chief minister said that applying the uniform formula for special category and other states was unjustified and the matter had been taken up with Prime Minister Manmohan Singh.

Burdened with Rs 2615 Cr of pay arrears and Rs 995 Cr of pension arrears on account of 5th Pay Commission recommendations, he said the government had already paid out Rs 1636 Cr of pay arrears and Rs 566 Cr of pension arrears.

Other than that additional dearness allowance of about Rs 1000 Cr had been paid to employees. Provided inflation is contained the government would make provisions to pay the remaining Rs 1406 Cr arrear by next year, said Dhumal.

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  1. says: Devinder K. Sharma

    If the proposed water tax is going to be an additional levy on the independent power producers(private investors) interested in investments in hydro-power sector, it is certainly going to have a cascading effect. Cascading taxation in neither good in law nor in practice. The State Government should internalize the proposed levy into the free power or royalty charges so that the basic tenets of taxation are not militated against. The existing charges,levies or imposts are already making exploitation of hydro-power potential in Himachal Pradesh less competitive as compared to other States and further loading would only make it almost entirely unattractive. Another problem being faced by the IPPs is that the power evacuation arrangements are extremely unsatisfactory due to the fact that the activity is a State owned monopoly. There is, therefore, utmost need to tread with caution in this field.

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