NPC clears Uttaranchal for special category status

By Our Special Correspondent

NEW DELHI, FEB. 16. The Planning Commission has cleared the request of the newly created hill State of Uttaranchal to be granted `special category State' status. This was disclosed by the Deputy Chairman of the Planning Commission, Mr. K. C. Pant, to the Chief Minister, Mr. Nityanand Swami, when he called on the former here today.

Mr. Pant informed the Chief Minister that the Commission had cleared the proposal and a Cabinet clearance would be secured soon for the special category status to the State. Predominantly hill districts account for about 90 per cent of the total area of the new State while more than two-third of the population of the State resides in hill areas. Almost one-third of the total area of Uttaranchal is either rocky or snow covered or glaciated or is otherwise unproductive degraded land.

The grant of special category State status would mean that Uttaranchal would get Central assistance in the form of 90 per cent grant and 10 per cent loan. ``Normal'' States get their assistance in the ratio of 70 per cent loan and 30 per cent grant.

During the discussions between Mr. Swami and Mr. Pant, the Chief Minister sought a special financial package for the State because it had borrowings of over Rs. 20,000 crores and its interest liability was almost 45 per cent of its revenues. Mr. Pant, while suggesting that the State take urgent measures to reduce this interest burden, also said that the State should also try to reduce the excess manpower it had inherited from the parent State of Uttar Pradesh. Since the population of the State was five per cent of the erstwhile Uttar Pradesh, Mr. Pant said the share of the manpower should also be five per cent of that of UP. At present, about 18 per cent of the manpower of UP has been transferred to Uttaranchal.

Mr. Swami was also told to consider taxing irrigation in the State and also consider a tax on large land holdings. The Chief Minister was said that the State should draw up a fiscal reforms programme and then sign a memorandum of understanding with the Finance Ministry to benefit from the Rs. 5,000 crores kept aside for reforming States.

Mr. Swami, on his part, said that division of assets between UP and Uttaranchal had not yet been completed which was holding up some reforms measures, such as power sector reforms. He pointed out that Madhya Pradesh and Chhattisgarh had already divided their assets.

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Section  : Other States
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