15th Finance commission chairperson NK Singh (right) with Sikkim chief minister PS Golay

Gangtok: The Sikkim government has demanded Rs 71,623.97 crore from the 15th Finance Commission for the next five-year plan, including a state-specific grant of Rs 26,483 crore to bridge its resource gap, informed a PIB release.

The demand was submitted during a meeting of 15th Finance commission chairperson NK Singh and his members with chief minister PS Golay, his cabinet colleagues and senior government officials.

The Sikkim government submitted that the 14th Finance Commission had projected the state GSDP based on a trend growth rate of 24.32% which was “very high as compared to actual”. It led to high calculation of OTR for the award period. Due to this, Sikkim became ineligible to get revenue deficit grants from the 14th Finance Commission.

The Himalayan state also sought compensation for its farmers since they do organic farming which has a high production cost. Increase of the states’ share in overall divisible pool of taxes to 50% was also sought along with ‘peace bonus’ and value of the amount of carbon sequestered by Sikkim’s forests.

The challenges posed to development of Sikkim due to its mountainous terrain, climate change and natural disasters were also shared with the commission and the state sought separate grants for disaster management.

“The meeting discussed in details all the state-specific queries raised by the chairman and members. The state was assured that all their issues would receive due attention of the commission in its recommendations to the union government,” mentioned the release.

Further, the commission noted that Sikkim has good potential in tourism, organic farming and horticulture. The state could establish more cold storages, value chains and develop food processing industries.

Meanwhile, the commission observed that Sikkim should speed up the execution of the ongoing hydel power projects so as to exploit its potential and to increase the revenue earnings.

The commission also observed that the fiscal deficit of Sikkim has remained under 3% in recent years except in 2018-19 (RE) and the state is mostly revenue surplus. Also, the AG Sikkim informed of significant off-budget borrowings amounting to Rs 3,628 crore of the state government.

According to the 5th Employment Un-employment survey of Labour Bureau 2015-16, Sikkim has second highest unemployment rate of 18.1% (after Tripura). High per capita income and good share of secondary sector in GSDP is paradoxical to the high unemployment rate hinting towards jobless growth, the commission observed.

The commission also pointed out that Sikkim has third lowest own-tax revenues out of all states, in spite of having second highest per capita income. Due to sparse own resource base, the state depends heavily on transfer of resources from the central government. It receives 75% of its total revenue receipts from union government.

Meanwhile, the state government informed the commission that seven out of 15 public sector undertakings are non-working, and the accumulated losses of the nine state PSUs have increased to Rs 1,013.27 crore.

The state government also submitted fund requirements for the panchayat and municipal bodies in Sikkim for the next five years, seeking a one-time grant of Rs 1,100 crore for support of human resources and building of panchayat ghars, and Rs 660 crore for basic infrastructure, urban local body office, town halls and training institutes.

On the first day of its visit, the commission had a detailed meeting with the representatives of all the political parties in the state including Bhartiya Janta Party, Sikkim Pradesh Congress Committee, Sikkim Democratic Front and Sikkim Krantikari Morcha. All the issues raised by the parties were noted by the commission for addressing at the time of framing its recommendations, the PIB release said.

Meanwhile, a state government release informed that the commission chairperson expressed deep concern about the present road condition between Sevoke and Rangpo. He, however, expressed his satisfaction and mentioned that Rangpo-Gangtok road condition of the NH 10 is far better.

The two road stretches under NH 10 are been looked after by West Bengal government and National Highways and Infrastructure Development Corporation Limited (NHIDCL) owned company of the Ministry of Road Transport & Highways respectively.

The chief minister informed the commission chairperson that he has already expressed his concern over the poor road conditions and had written to the Home ministry and also raised the issue in the recently concluded North East Council meeting at Guwahati.

Singh also assured that he will also raise this issue of bad road conditions with the Union road transport & highways minister Nitin Gadkari and also with the chairperson of National Highways Authority of India.

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