Uttarakhand has been facing a severe financial crunch despite Chief Minister BC Khanduri announcing a slew of new projects worth over Rs 1,200 crore in the last two weeks.
On Monday, the chief minister re-launched the 120-Mw Vyasi hydel project near Dehra Dun on the river Yamuna. The state government will spend Rs 758 crore on the project, which had been stalled for the past two decades.
He also laid the foundation stone for an overhead bridge and five other projects on the Dehra Dun-Haridwar highway worth Rs 170 crore.
The BJP government faces the twin challenge of fulfilling its election promises as well as the award of the Sixth Pay Commission.
Though the government has been facing financial crisis, Khanduri remains unperturbed. According to him, proper budgetary allocations are being made for all the fresh announcements.
The state government decided to provide revised pay scales to its employees in accordance with recommendations of the Sixth Pay Commission. But this has opened a Pandora’s box with teachers and employees of various corporations, boards and panels also resorting to strikes to demand identical pay hikes.
According to an estimate, for paying the arrears and increased salaries till March 31, 2009, the government has to bear a burden of Rs 5,000 crore. With the announcement of new schemes, the state government is now relying all its hopes on the central government. The Uttarakhand government is seeking a pre-devolution deficit grant of Rs 40,000 crore from the 13th Finance Commission in this regard.
But experts said the financial crisis is likely to be more severe in 2009-10 when the government would be paying 60 per cent of the arrears. This will again jeopardise the plan size, which includes various infrastructure and social sector projects of the state government as the non-plan expenditure gets heavy.
INDUSTRIES ARE BARE MINIMUM, ADMITS GOVT
In the midst of the economic recession, the Uttarakhand government today admitted in the state assembly that the number of industries in the hilly areas was bare minimum.
In his speech at the first session of 2009 in the assembly where a vote on account would be presented instead of a regular budget this time, Governor BL Joshi said the government has brought out an integrated hill development industrial policy with an aim to lure investments and create job opportunities as the number of industries in the hills was bare minimum.
Though the hill policy guidelines were notified in October last year, industrialists are shying away from setting up new manufacturing units in the hills due to the economic slowdown despite heavy incentives offered by the government.
On the power front, the governor said the state has already harnessed a potential of 3,140 Mw. This is an addition of 340 Mw as compared to the last year after 304 Mw Maneri Bhali-II and a couple of micro and small hydropower projects came into operation in the state.
