By Shishir Prashant 
PrashantNews
As the 16th Finance Commission is likely to present its report to the centre by October 31 this year, Uttarakhand on Monday sought an increase in the tax devolution parameters related to area from 15 to 20 percent and forests from 10 to 20 percent.
This was stated by the 16th Finance Commission Chairman Dr Arvind Panagariya after a meeting with Uttarakhand Chief Minister Pushkar Singh Dhami at the secretariat.
Dr Panagariya praised the hill state for moving forward rapidly on the development front and said that in view of the difficult geographical conditions, discussions were held at a wide level to resolve the challenges faced by Uttarakhand.
Earlier, in the meeting, the Chief Minister put forth his views in detail on the financial challenges and development needs of the state.
Dhami requested the Finance Commission to compensate the state in accordance with the spirit of ‘environmental federalism’ in view of the ‘eco service cost’ of Uttarakhand, increase the weight prescribed for forest cover in ‘tax-transfer’ to 20 percent.
The Chief Minister said in the last 25 years, Uttarakhand has made remarkable progress in the field of fiscal management. He said that the size of the state budget has crossed Rs one lakh crore, while in the SDG Index Report of the year 2023-24 released by NITI Aayog, Uttarakhand has emerged as the leading state of the country among the states achieving the goals of sustainable development.
Referring to the two major challenges facing the state due to more than 70 percent of the total geographical area of the state being covered by forests, the Chief Minister said that on one hand, due to this, more expenditure has to be made for the conservation of forests, while on the other hand, due to the prohibition of any other development activity in the forest area, ‘eco service cost’ also has to be borne.
In this regard, the Chief Minister requested for giving appropriate compensation to the state in accordance with the spirit of ‘environmental federalism’, increasing the weight prescribed for forest cover in ‘tax-transfer’ up to 20 percent and giving special grants for proper management and conservation of forests in the state.
He said that due to the end of the state’s industrial package in 2010, the ‘location disadvantage’ is not being met, while due to difficult geographical conditions and other practical difficulties, special budget provisions have to be made in the hilly areas of the state due to very limited participation of the private sector in important sectors like education and health.
Describing Uttarakhand as very sensitive to natural disasters, the Chief Minister said that the state needs continuous financial support to effectively deal with disasters and for relief and rehabilitation work. Dhami mentioned the limited possibilities of hydropower generation in Uttarakhand due to the rules implemented after the Ganges was declared a national river, saying that due to this the hydropower sector is not able to make the expected contribution to the economy, while there is heavy loss in the field of revenue as well as employment.
A delegation of the Congress led by State party Vice President Suryakant Dhasmana also met Dr. Panagariya and demanded that the state should be provided green bonus as compensation for its environmental services, protection of water, forest and biodiversity for the country. He said that Uttarakhand should also get a special package for the long-term disaster management preparedness.