Uttaranchal's financial position precarious

By Our Special Correspondent

NEW DELHI, NOV. 27. The newly-created State of Uttaranchal seems to have got a raw deal from its parent State of Uttar Pradesh. Against the five per cent of the original population of U.P. that has fallen in Uttaranchal's share, the new State is to get around 13 per cent of the staff strength of the erstwhile U.P.

However, sources in the Government indicate that U.P. has transferred more than 20,000 employees of the Irrigation Department to the new State, who are virtually non-functional in Uttaranchal where the irrigation potential is much lower than in U.P. The sources said that U.P. is under obligation to reduce its staff in specified sectors of the economy as per an agreement signed with the World Bank as part of the conditionalities of a loan it secured from the Bank. U.P. is said to have utilised this opportunity to transfer the Irrigation Department staff and comply with the Bank conditionalities.

As it is, Uttaranchal's financial position is precarious and the new State will start with a huge deficit on its balance sheet. According to preliminary estimates, receipts of the State are estimated to be around Rs. 1,250 crores a year whereas its total non-Plan expenditure alone is expected to be Rs. 2,300 crores. In this, the wage bill alone of the Government will be Rs. 1,200 crores.

The State also has an interest burden of Rs. 400 crores annually and has a Rs. 60 crore expenditure on committed liabilities. On the other hand, with the plains of Uttaranchal reporting high per capita income, the State's share in devolution of Plan funds, share in Central taxes and even the limit on ways and means advance from the Reserve Bank of India would be proportionately less than what the barren hills of Uttaranchal would have otherwise received.

Uttaranchal is also not likely to get any share out of the earlier World Bank loan which was advanced to the undivided U.P. since that loan has already been exhausted. Also, the earlier sub-Plan for the areas which now comprise Uttaranchal used to be Rs. 900 crores annually and now stands reduced to Rs. 700 crores. There are also some 23 projects in the State sector in Uttaranchal which at present are closed and require funds for revival.

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