As the BJP government strives to make Uttar Pradesh a $1 trillion economy, the 15th Finance Commission on Tuesday expressed its concern over rising government debt, non-compliance of fiscal responsibility and subdued capital expenditure in the state.
The panel, headed by N K Singh, however, lauded the state government for decline in poverty and an increase in the forest cover in the state. The mixed reaction came during the Commission’s meeting with Chief Minister Yogi Adityanath, state Cabinet ministers and senior officials.
The Commission flagged a high burden of pension and interest because of the Seventh Pay Commission and increasing losses suffered by public sector undertakings (PSUs).
It pointed out that out of the 107 public sector undertakings, 100 are making losses. The losses of the PSUs and corporations ballooned to Rs 1,25,325 crore in 2017-18 from Rs 62,901 crore in 2012-13. The Commission, however, appreciated a 100 per cent progress in feeder metering and rural feeder audit under the Centre’s Ujwal Discom Assurance Yojana (UDAY) scheme.
It expressed its concern over aggregate technical and commercial, or AT&C, (which refers to efficiency of power transmission between various stakeholders) losses. Citing a power ministry report, it said AT&C loss was 24.64% in 2018-19 against the target of 19.36%.
The Commission stressed that the state needed to prepare a plan to ensure clean air in million-plus population cities such as Agra, Allahabad, Ghaziabad, Kanpur, Lucknow, Meerut, Varanasi. These cities, according to the panel, have exceeded the National Clean Air Programme threshold.
An official statement by the Press Information Bureau said the commission, on the basis of the Fifth Annual Employment Survey (2015-16), observed that Uttar Pradesh had one of the highest unemployment rates of 7.4 per cent against the all-India average of 5 per cent.
Meanwhile, a state government spokesperson said the Finance Commission observed that the state had recorded a higher state GDP than the national average. The panel was satisfied with the state’s roadmap over sustainable development goals, the spokesperson said. Chairman N K Singh is said to have praised development work in Varanasi and other places to attract more tourists.
Singh said that to achieve Prime Minister Narendra Modi’s goal of a $5 trillion economy by 2024-25, Uttar Pradesh needed to become a $1 trillion economy.
Speaking to reporters, Singh said, “For India to become a $5 trillion economy, UP has to become $1 trillion economy. For development of UP, a new growth rate is needed. If UP continues to move at this (current) rate, then it will not be able to become a $1 trillion economy.”
On the possibility of a package for the state from the commission to make the economy $1 trillion, Singh said, “The team of the Finance Commission has toured 27 states, and there is not a single state which has not demanded a special package. What parameters will be used, how much weightage will be given and under which formula funds be divided between Centre and states, are some of the challenges before the commission. So you have to wait for the commission’s report.”
Singh also said, “The current position of the state in the context of UN’s Sustainable Development Goals is not laudable. Priority should be given to education and health sectors. The programmes (as the parameters) which have been presented before the Finance Commission, there will be special sympathy on them (programmes). If work is done on the thoughts of the commission as to how to transform the district hospitals into medical colleges, then it will benefit the state.”
The head of the Finance Commission also said that possibilities in the state are more than the challenges.
He underlined that the commission was considering giving support for training nurses and paramedical staff and highlighted the need to develop district hospitals into medical colleges.
He also said that agriculture should be one of the main focus areas of the state.