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Nov 12, 2019-Tuesday



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Tuesday, Nov 12, 2019

Reduce debt burden, finance commission tells UP

  Updated: Oct 22, 2019 20:21 IST

LUCKNOW: Expressing concern over the rising debt burden of Uttar Pradesh, the 15th Finance Commission on Tuesday asked the state government to bring down the indebtedness to 25 per cent of the GSDP in next two to three years.

Although the commission lauded the state’s efforts on various fronts and assured to take a sympathetic view to help achieve objectives to improve health, education and other sectors, the rising debt burden was an issue of concern.

“UP’s debt burden needs to be brought down substantially. There has been some downward direction. But we need to see much faster progress…We will like it (debt burden) to come down to 25 per cent of the GSDP,” said NK Singh, chairman of 15th Finance Commission, while speaking to media persons before winding up the commission’s four-day visit here on Tuesday.

UP’s 2018-19 indebtedness is estimated to be 29.8 per cent of the gross state domestic product (GSDP).

Singh referred to Prime Minister Narendra Modi’s goal of making India a $5-trillion economy and said “Uttar Pradesh, with 17 per cent population, needed to contribute to achieve this objective by becoming a trillion dollar economy. The state needed to achieve newer growth to become a trillion dollar economy. India cannot become a $5-trillion economy unless UP becomes a trillion dollar economy.”

Singh, who along with members of the commission, had a long meeting with chief minister Yogi Adityanath and his ministerial colleagues and watched various presentations early in the day, said UP had a higher GSDP growth vis-à-vis the national average and was adhering to financial discipline by keeping the fiscal deficit to less than 3 per cent as provided under the Fiscal Responsibility and Budget Management (FRBM) Act. He said the implementation of UDAY, the scheme for revival of power sector companies, had led to an increase in the state’s borrowings. He said the state, however, had worked out a roadmap to bring down the rising debt burden.

He said Uttar Pradesh was not able to achieve the objectives of UDAY as the line losses etc had not come down and losses of power companies had gone up from Rs 12,000 crore to Rs 18,000 crore. Considerable progress had been made in this direction, too, and UP was likely to move forward in accordance with UDAY’s objectives in next two years, he said.

With reference to the sustainable development goals (SDGs), Singh said UP’s achievements were below the national average and this could not be appreciated. He said the state’s average in health and education sectors was below national average. He said the commission was, however, satisfied with the state government’s efforts as the gap between the state’s performance vis-à-vis the all-India average has narrowed down in the past two years.

Singh said the commission would have a sympathetic view on how health sector initiatives could be given priority.

About the state government’s move to turn district hospitals into medical colleges he said if the members of the commission agreed to the idea, the state would be benefit. He also referred to the government’s move to link pre-primary education with primary education and said the chief minister was even contemplating a move to link pre-primary education to the anganwadi centres.

Asked about the agriculture sector reforms, Singh said the centre had set up a committee with Maharashtra chief minister Devendra Fadnavis as its chairman.

He said UP chief minister Yogi Adityanath was a member of the committee and a draft report of the committee would be circulated by October 25.

Singh said agriculture sector reforms that included amendment to the Agriculture Produce Market Committees (APMC) Act, removal of regulatory hurdles and rationalizing essential commodities law through amendment were needed for doubling the income of farmers.

The finance commission chairman stressed upon the need for population control and said the commission had received various suggestions on the issue. He said it was high time for demographic management or else the commission would not be able to do justice. Coordination between equity and efficiency would be a challenge, he said.