The debt to Gross State Domestic Product (GSDP) ratio of 38 per cent in Himachal Pradesh is unacceptable and unsustainable.
Chairman of 15th Finance Commission N K Singh stated this while talking to mediapersons during the second day of his three-day visit to Himachal Pradesh.
At the same time, Singh said the debt to GSDP ratio ten years ago had been worse in the state as compared to current situation. Huge progress has been made in the last ten years to bring down the ratio to 38 per cent but this ratio is unacceptable and unsustainable, he added.
A lot more is required to be done to further bring down the ratio to at least further 8-10 per cent by making debt reduction plan to reduce the debt at least 1,200 crore more, he added.
It can not be done overnight but medium-term plan should be made to achieve fiscal deficit target.
In reply to a question, he said there is a need to formulate a mechanism and funding pattern for providing special financial assistance to Himalayan states including Himachal and north eastern states to tackle natural calamities.
An intensive study is required for that and he would send some concerned experts to these states before finalising response mechanism and funding pattern, he added.
However, HP has made credible progress in adhering to the macro-economic parameters, he added.
Hydroelectric potential is a major source of revenue for the state but its full potential could not be realised due to the fact that the centre does not recognise hydel projects beyond a certain threshold as renewable energy projects, he added.
Earlier, Himachal Pradesh Chief Minister Jairam Thakur along with his Cabinet colleagues in his welcome remarks urged the Commission to make a realistic assessment of the revenues and provide a post devolution revenue deficit grant as Himachal Pradesh historically has been a chronically revenue deficit state. He stated that state is incurring annual losses of around Rs 3,000 crore due to abolition of Planning Commission.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)