Dainik Nation News Portal
DAINIK NATION BUREAU/DEHRADUN
The Sixteenth Finance Commission’s Chairman Dr Arvind Panagaria has praised the state government’s efforts in maintaining fiscal discipline and managing financial responsibilities as well. Talking to the media Commission Chairman said it is commendable for a developing Himalayan state.
Dr. Panagariya said that while fiscal deficits are natural for growing states, Uttarakhand’s balanced fiscal deficit does not raise immediate concern. “A deficit is not necessarily a problem in a developing state, as long as it is managed wisely and doesn’t spiral out of control. Uttarakhand is fully aware of its financial challenges and is responding appropriately,” he stated.
He also mentioned that the state’s per capita income more than the national average, which is a strong indicator of economic strength and development. He added that there is still scope for improvement and growth, especially as the government is actively working to increase its own revenues through enhanced resource mobilization and economic activities.
Addressing the special needs of Himalayan states, Dr. Panagariya emphasized that all previous finance commissions have acknowledged their unique geographical challenges. He reiterated that the 16th Finance Commission is committed to continue that support while recommending a fair revenue-sharing formula between the Centre and the states.
Explaining the revenue-sharing formula, Dr. Panagariya said the Commission has laid down clear parameters:
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Income distance: 45%
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Demographic performance (based on low fertility rate): 12.5%
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Population and area: 15% each
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Forest and ecology: 10%
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Tax and fiscal management: 2.5%
He emphasized that the Commission’s goal is to ensure equitable and effective distribution of national resources, aligning with constitutional provisions.
On the matter of budget allocation for local bodies and panchayats, he stressed that the Commission gives full attention to grassroots development, but implementation also depends on how states plan and utilize the funds released.
Uttarakhand’s leadership expressed confidence that this positive review would boost investor trust and motivate the state to pursue further financial reforms and development goals.
