15th Finance Commission holds meeting with the Government of Uttar Pradesh

New Delhi: The 15th Finance Commission headed by Chairman, Shri N.K. Singh alongwith its Members and senior officials met today with Chief Minister of Uttar Pradesh, Yogi Adityanathalongwith his Cabinet colleagues and senior State Government officials.

The Commission observed that:

Uttar Pradesh is the largest State in terms of population. It constitutes 16.78% of all State’s population with an urbanisation rate of 22.3%.
The State constitutes 7.35% of area of all States.
Population density of Uttar Pradesh is 829, which is way above the national average of 382.
Share of Primary, Secondary and Tertiary sector in GSDP is 25, 23 and 44% respectively in 2017-18.
Per capita Income of Rs. 55,456 in 2017-18 is below India’s average of Rs. 1, 14,958.
In 2017-18, transfers from the Centre constituted around 58% of the total revenue receipts of the State.
Population Below Poverty Line 2011-12 of 29.43% as against national average of 21.92%.
A high decennial growth rate 2001-11 in population of 20.23% as compared to national average of 17.69%.

The Commission was appreciative of the fact that:

The State has shown significant improvement over SDG-1. The states poverty declined from 40.9 % in 2004-05 to 29.4% in 2011-12.
The GSDP growth of the State has been in line with the GDP growth in the past years. The trend growth rate of the State in 11.09% during the period 2011-2018 whereas GDP at current prices has a trend growth rate of 11.56% over the same period.
The net earnings of the UPSRTC has started moving to a positive trajectory from 2017-18. There have been significant improvements in the earnings per kms and significant reductions in the cost per km.
According to Forest Survey of India, the State has shown 1.51% increase in the forest cover in 2017 from 2015. This shows state’s commitment towards maintaining of ecological cover in the State.
There has been substantial progress in development of Integrated Financial Management System (IFMS) in State:

The Finance Commission was concerned about:

Rising Outstanding Debt to GSDP Ratio, Non Compliance with State FRBM and Declining Capital Expenditure
The State is exhibiting a rising trend in its Outstanding Debt to GSDP no’s. The Debt to GSDP ratio has increased from 31.57% in 2012-13 to 34% in 2017-18.
During 2017-18, there has been an overall decrease in capital expenditure of Rs 30,701 crore (44 per cent) over the previous year mainly due to reduction in expenditure under:
Roads and bridges (Rs. 14,724 crore)
Power (Rs. 3,369 crore)
Food storage and warehousing (Rs. 1,748 crore)
Major irrigation (Rs. 1,586 crore)
Power Sector
There is ahigh burden of pension and interest on the State due to 7th Pay Commission.
The State PSUs have been suffering increasing losses. Of the 107 PSUs, accounts of 100 PSUs are in arrears.The losses of the working PSUs and corporations have increased from Rs 62,901 crore in 2012-13 to Rs 125,325 crore in 2017-18. In spite of the fact that significant investment has been made by the Government of UP in the Power Sector PSUs, the losses in the power sector PSUs increased from Rs. 11,829 crores in 2012-13 to Rs. 18,415 crore in 2017-18.
In the implementation of UDAY Scheme in DISCOMs, the State has achieved 100 % progress in Feeder Metering and Rural Feeder Audit. However, the State’s performance is not satisfactory and is way below the targets for parameters like DT Metering Urban, DT Metering Rural, Smart Metering, AT&C losses and Electricity to unconnected household.According to the input received from Ministry of Power the States AT&C losses in 2018-19 is 24.64 as against the target of 19.36 during the same period.
Other important facts that has been brought to the notice of the Commission:

The 5th SFC constituted in 2015 had submitted its report on 31st October 2018. The key recommendations are under consideration of the Cabinet sub-committee. The State is currently implementations the recommendations of the fourth SFC Report.
Special focus has to be made for aspirational districts of Bahraich, Balrampur, Chandauli, Chitrakoot, Fatehpur, Shrawasti, Siddharthnagar, Sonebhadra (8 Districts out of 117 aspirational districts)

Key Social Indicators- Adverse as compared to National Average:

Though the State has shown significant improvements in the key outcomes of health and education NFHS-4 as compared to NFHS-3, the State lags behind in the key social indicators of health and education as compared to All India Average indicated in the table on social indicators above. The State needs to make efforts to overcome this gap.
The State’s performance in key social indicators is adverse as compared to the National Average for key social indicators.
The State has a SDG Index value of 42, lower than the national average value of 57. The State ranks 29th amongst the Indian States.
The State needs to improve on SDG 1 No Poverty, SDG 2 Zero Hunger, SDG 3 Good Health and Well Being, SDG-5 Gender Equality, SDG-7 Affordable and clean Energy, SDG-9 Industry Innovation and Infrastructure, SDG-10 Reduced Inequality and SDG-11 Sustainable Cities and Communities.
Million plus cities (Agra, Allahabad, Ghaziabad, Kanpur, Lucknow, Meerut, Varanasi) in the State have far exceeded the National Clean Air Programme (NCAP) threshold for PM 10 (i.e. PM 10 above 90 micrograms/m3). The State needs to chalk out a plan to increase the ease of breathing of these cities and for them to emerge as economic centers and investment hubs.
According to the 5th Annual Employment- Unemployment Survey 2015-16 (Ministry of Labour and Employment), among the major States, Uttar Pradesh has one of the highest Unemployment Rate (UR) of 7.4 per cent as againsttheallIndialevelof5percent.
Productive employment of youth is an essential factor for economic development. The State has also mentioned in its memorandum that, it has the largest proportion of young population which will have to be provided with not only education and health facilities but also with proper job opportunities so that they may contribute to the overall growth of the country.
The ongoing programmes for skill developmentand employment generation should be effectively implemented so as to equip the youth for finding better employment opportunities.

The State has made a State Specific Grant for Rs. 1,02,138 crore. Rs. 30,000 crore for Power; Rs. 10,000 crore for Drinking water for Bundelkhand and Vindhyanchal Region; Rs. 3,000 crore for Rural Sanitation; Rs. 3,900 crore for Promotion of Tourism; Rs. 10,400 crore for construction of Roads and Bridges; Rs. 6,103 crore for SSA teachers Salary; Rs. 7,736 crore for Basic infrastructure development in schools; Rs. 357 crore for Forensic Science Labs; Rs. 1,750 crore for Police lines in new districts; Rs. 1,050 crore for Jails in new districts; Rs. 2,500 crore for Urban Development; Rs. 1,422 for conservation of Forest and Environment; Rs. 5,720 crore for Medical Education; Rs. 13,846 crore for Medical & Health; Rs. 4,262 crore for Pre-Metric & Post-Metric Scholarship and Rs. 92 crore for Conservation of Archeological works. It has also made a demand for Rs. 4,35,090 crore for rural and urban local bodies of the State.

Earlier the Commission had a detailed meeting with the representatives of all the political parties in the State including Sh. J.P.S. Rathore and Sh. Y.P. Singh from BhartiyaJanta Party; Sh. Salman Khurshid and Sh. Anoop Patel from BhartiyaRashtriya Congress; Sh. Ravi Prakash Verma and Sh. Udayvir Singh from Samajvadi Party; Sh. K. K. Sharma, Sh. Lakshman Prasad Tripathi and Sh. Umashankar Yadav from Rashtravadi Congress Party; Sh. SurendraNath Trivedi and Sh. Javed Ahmed from RashtriyaLok Dal; Dr. Girish Sharma and Shri Arvind Rai Swaroop of CPI and Sh. Premnath Rai of CPI(M).All the issues raised by the parties were noted by the Commission for addressing at the time of framing its recommendations.

The Commission has assured the State to look into all the issues and address them in the best possible way in its report..

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