With soaring tourist traffic to hill stations like Mussoorie, Simla and Shillong putting pressure on already choked infrastructure of these towns, the Himalayan states have come together to seek special grant from the Centre.
They have urged the Finance Commission to give preferential treatment and make suitable provision in the devolution formula for additional share of the Centre’s tax kitty. Making a strong case for enhanced resources, the Himalayan states, in a representation to Finance Commission Chairman NK Singh, have said that infrastructure of the region is deficient and hence to improve service delivery and overall progress, they need special attention.
The tourist inflow to these states is expected to double by 2025.
The states have said that they are behind the national average in own tax/gross state domestic product (GSDP) ratio. As a result of mismatch between receipts and expenditure, most of the states are heavily dependent on central transfers to meet their requirement. “In the long run given the low fiscal capacity of the states, if the due revenue deficit grant is not given, then to meet its statutory and constitutional obligations, these states will have to borrow more which will further increase the debt to GSDP ratio of the state, making it highly indebted,” the memorandum said.