Well Done and Take Care, Uttarakhand !

By R S Tolia • Random Thoughts • 3 Apr 2010

First April newspapers brought on the table quite a mixed fare of news ranging from " shelving of two dams on the Bhagirathi ensuring its free flow," to " ending of trial of Ajmal Kasab", with two other equally historic events, thrown in between, registering their individual presence, namely launching of the Right to Education ( RTE ) and formal commencement the gigantic 2011 Census. Taken together, these four headliners do tend to make India a real happening place.

 

Uttarakhand  :  As  a  role-model  ?

 

Excepting the news related to the ultimate fate of Ajmal Kasab ( verdict due on May, 3 ) the other three headers do affect all of us  in Uttarakhand, one way or the other ; the first easily most comprehensively. Without going into the economics or politics, or for that matter the polemics of the two, this writer strongly feels that it is about high time that immediate mechanisms are put in place where a 'well-rounded', 'long-term' and a non-partisan view on the first issue i.e. the hydro-power projects on the Uttarakhand  rivers, is taken, so that the same becomes a trend setter of sorts for the rest of the country. But then, do we have in us, as a state, what it takes to become a role model in the country, is the poser which I wish to address in this piece ?  Have we done or achieved anything so far during the past one decade or so of our existence about which we could really pat ourselves on the back and say to ourselves  –  Well  Done ?

Why Himachal  vrs  Uttarakhand  only  ?:

 

Right from the day of my first posting in civil service, in district Uttarkashi, way back in July 1973 – 74, first as SDM Dunda and later as SDM Purola, I have had the unenviable distinction of becoming a circumstantial victim and longest surviving witness of an unending 'comparison syndrome', which I later christened as ' Himachal vrs Uttarakhand  syndrome '. Every body seems to be affected or infected by it, when it comes to addressing how Uttarakhand is doing, or what developmental potential really exists in this state ? I remember, when Mukul Sanwal, one of my batch-mates, wrote a piece about Uttarakhand ( then UP Hills ) and its future potential, he instinctively leaned over it and did his piece ( Economic and Political Weekly ); and now after Uttarakhand has come into existence, India Today's annual feature ( 2003 onwards ) State of the States, includes these two Himalayan states, and of course J&K, amongst the 20 comparable major states. From year 2003, Uttarakhand has valiantly hung-on to its 9th position in a comity of 20 major states, while Himachal, has really excelled itself and jockeyed to the very top of the table, fractionally missing the top spot ! True, last year ( 2009-10 ), was the only exception, when we did slip down to the 11th position, for the first time, from a consistent 9th ! Excepting the criterion followed for the Public Order and Criminal Justice, by a team headed by Deboroy, one would generally tend to agree with the overall assessment of this ranking. So, both the States have occupied " above the average " ratings, or 9th to 2nd slots, thus far among the G – 20 of India.   

 

Departing from the past a very modest attempt indeed was made by me, when I visited Himachal as Chief Secretary of Uttarakhand, and suggested that in place of this nerve – shattering 'comparison syndrome', Himachal and Uttarakhand should come together, explore the thematic development sectors where they could collaborate, co-operate and co-ordinate their efforts. If my memory serves me right as many as five development sectors were short-listed for joint venture namely Horticulture, Civil Aviation, Tourism, Fisheries, and last but not the least Hydro-power electricity generation. I thought these two major Himalayan neighbours, with so much of geo-socio-cultural commonality, could achieve so much jointly. For example, we could profitably learn from Himachal the outstanding progress they have notched up in Horticulture and Fruit-processing; in Tourism and Civil Aviation, together we could consolidate and forge our fledgling efforts and monopolize the unprecedented opening allowed by Nepal's political turbulence, thus offering the in-tourist an equally tempting bouquet of tourist-destinations, tour- products like eco-tourism, wildlife safari and so on. Encouragingly enough though a Committee of Chief Secretaries ( CoCS ) was formally constituted by the two states, to over-see and co-ordinate implementation of this out-of-box suggestion, various circumstances intervened to thwart the initiative. I do, however, still fondly hope that these two Himalayan States would soon appreciate the inherent merit behind the suggestion and overcome their political and other differences to jointly become a role model of equitable and distributive development for all the other beleaguered Himalayan states of India. By the way, these remain the only two Himalayan states, in my view, without any major law and order problem or an irreparable sectarian divide ;  not forgetting a rare political social bonhomie amongst their elected representatives. We must concede this brownie point to the elected representatives of these two western Himalayan states.

 

Hydro-power generation  ::

 

Do we have anything to learn from our much older Himalayan neighbour when it comes to developing Hydro-power in the mountain regions ?  Do they have any major insights to offer which we could profitably use while trying to resolve this burgeoning issue i.e. to harness or not to harness hydro-power from snow-fed mountain rivers ? How are they addressing the various related issues involved, sans or including the so-called religious dimension added recently, by the various Akharas partaking in the Haridwar Mahakumbha ?   

 

My First April mail also had in it an important report from my old friend Dr. Brij Gopal, a former Professor of Environmental Sciences, Jawaharlal Nehru University, New Delhi and a Member, Board of Directors, International Society of River Sciences. Given its salience I also consulted him on telephone about his findings on the Ravi / Beas hydel projects in Himachal, the subject matter of his report. His report covers various environmental aspects of Flow Requirement Downstream of Hydel Projects, the core issue of this entire debate. As mentioned, being of recent origin its findings obviously have great salience for our own state as well and it is this aspect I wish to dwell on, at some length here.

 

Dr. Brij Gopal assisted the government of Himachal Pradesh, as an expert environmentalist of river systems and water, in a matter of on-going Writ Petitions before the High Court of Himachal Pradesh.  Chamera I,  Chamera II and  Baira Siul of National Hydro Power Corporation ( NHPC) and Shanan Hydel Project of the Punjab State Electricity Board ( PSEB), all over river Ravi, had approached the High Court of HP, through two separate Civil Writ Petitions against requirements made by a notification passed by the Government of Himachal Pradesh on 9th September 2005,  using provisions contained in Section 5 of the Environment ( Protection ) Act, requiring :

 

" that  all existing and upcoming Hydel Projects, to release and maintain a minimum flow immediately downstream of diversion structures of Hydel projects throughout the year at a threshold value of not less than 15% of the minimum inflow observed in the lean seasons into the main river water body whose water is being harnessed by these projects ".

 

The issues which were posed to a two member Expert Committee ( one of the members being Dr Brij Gopal ) for their consideration were:

 

( i ) Does the diversion of river flow have any significant impacts on the environment and ecology of the river downstream ?,

 

and  if  Yes,

 

(ii) How much water is required to maintain the ecological / environmental conditions at an accepted level, and should, therefore, be released.

 

These two naturally begged the third related question, which became a  technical  one,  namely  :

 

(iii) Can the required / desired amount of water be released from the existing diversion structures of the power projects of the petitioners ?

 

Aren't these precisely the issues which ought to be discussed very openly, objectively and in a strictly non-partisan way in the long-term interest of the state and the country,  by all the stake-holders, instead of spending energies in polemic of all kinds ? Certainly there is ample room for enlarging the Terms of Reference for the Experts who may be selected for the Panel to resolve the issue.  

 

The very brief point this writer is making here, from this solitary illustration, is simply that, our elderly neighbour, who commenced its development journey more than three decades ahead of us, is already in the process of learning, both from its various acts of omission and commission in the past ; so shouldn't Uttarakhand therefore  benefit from it ?  If the answer be yes then the modest initiative which was taken to constitute Joint –Forums, in a strictly a-political mode, with Himachal on Hydro-power harnessing, Tourism & Civil Aviation, Horticulture and Fruit-processing, and curious as it may seem to many, on Cold-water Fisheries, should be taken to its logical end. It seems to be both in the interest of the people of both the states, as well as the entire country. These themes  could be taken up for a starter, and this writer has absolutely no doubt that once a positive beginning is made in these few sectors, the rest of the country would be looking towards these two western Himalayan states, as the Change Masters of a totally new game, and the agenda would automatically expand itself. Just as geographical economic zones are being brought together ( SAARC, ASEAN, SAFTA) it is about time , within India, Indian States also join hands and think in terms of learning from each other, do things jointly. Larger geographical entities make better economic sense. In India DoNER has shown the way, why not a WHR ( Western Himalayan Region ) ?  

 

Leaving aside other observations I certainly would like to quote Dr. Brij Gopal for his most important and concluding recommendation, when he says, that " the State should commission/conduct a study on ecological economics of the hydel projects and environmental flows considering long term cost benefits and trade offs in an ecosystem perspectives, for arriving at an appropriate policy on the subject ".

 

The remaining part of his recommendation is nothing short of a litany of complaints as to how there is " no data on the river characteristics, no specific study of Environmental Flow in India so far in relation to its requirement for various kinds of organisms, habitat features, water quality or other aspects of river ecology ". Regardless of what Himachal does about these recommendations it is high time that Uttarakhand mounts not one but many projects, on its existing, under implementation projects and along all major and minor river systems. Himachal's various Act of Omissions must necessarily be taken on board as Uttarakhand's Initiatives of Action. This writer has already requested Dr. Brij Gopal, Prof. A.N. Purohit and Prof. S.P. Singh, all eminently competent to guide and mentor this state to draw up a long-term project for over-seeing and monitoring 'various changes in the up-stream dammed Lake between Tehri and Chinyali-saur ( as also part Bhilangana ), on a month to month and year-to-year basis', including some of the parameters which Dr. Brij Gopal has highlighted in his report. These time-line studies on river ecology incidently are required in both the scenarios i.e. pre, as well as the post Hydro Power project implementation stages. Mountains in general, particularly the Himalayas, can ill afford not to undertake such time-line observations and studies. Any such study is obviously going to be Mother of all Environmental Studies, without an  iota of doubt !   

 

This is something, many well-wishers of Uttarakhand, expect the newly formed state to, well, immediately – Take Care !

 

And,  Well  Done Uttarakhand !

 

The other major learning, typically and not surprisingly, yet again comes from Himachal; and it is something which many consider as an  Act  of  Commission  i.e.  to  be  strictly  avoided  !

 

The Eleventh Finance Commission in its Award had earmarked a sum of Rs 1,000 crores for Management of Forests by the states and allocated sums for the same on a pro rata basis, and it was here that Uttarakhand had taken some initiative ( now it seems with Himachal also pitching in independently and without sharing with other states ) and presented to the XIth Finance Commission an Additional Memorandum, also drumming up the issue with the help of other major forest-dominated states. This initiative now stands expanded into 'Environmental related Grants, Rs 5,000 crores each for Forests and Water Sector Management'; Uttarakhand's share growing from Rs 56 crores to  Rs 205 crores for forests and Rs 76 crores for Water' ( XII Finance Commission Grants ).    

That, however, is not what this writer wishes to bring to the notice of the readers here. It is about something which Uttarakhand has already done, been doing in fact for quite some time now; and  now through an official report of the significance of the national Finance Commission, an accepted forum for national accounting and allocation of financial resources, that such an achievement not only gets recognized but also gets suitably rewarded.

 

An article in Garhwal Post is hardly the place to discuss all that stands included in the Report of the Thirteenth Finance Commission ( 2010-2015 : December 2009 ). Suffice here to say that the much awaited Finance Commission award recommends a total transfer to 28 States of the Union of India a sum of Rs 17,06, 676  ( Seventeen lakhs Six Thousand and Six Hundred and Seventy Six crores ); excluding a sum of Rs 60,000 crores ( consisting of Rs 50,000 towards GST compensation, Rs 5,000 towards Grants for reduction in IMR, and Rs 5,000 crores towards Renewal Energy grants ). Obviously as state-wise allocation of these grants, being performance based, was not possible, adds up the Grants total to Rs 3,18, 581 crores; and the total transfers work out to be Rs. 17, 66, 676 crores. Finance Commission award is broadly in two categories; firstly, Share in the Central Taxes and Duties ( Rs. 14,48, 096 crores ) and  Grants in aid under as many as 15 heads.    

 

Out of the 15 heads two heads specially deserve attention of any conscientious reader; first being Post Devolution Non Plan Revenue Deficit ( NPRD), and the second, Performance Incentive. Under this NPRD Himachal figures among 8 states out of a total of 28 states and has been recommended a sum of Rs. 7,888 crores, out of a total of Rs 51,800 under this head. Other than Himachal the states receiving this Post Devolution NPRD grant consist of Jammu & Kashmir ( Rs 15,936 cr ), Nagaland ( Rs 8,146 cr ), Manipur ( Rs. 6,056 cr ), Tripura ( Rs 4,0453 cr ), Mizoram (Rs. 3,991 cr ), Meghalaya ( Rs  2,810 cr) and Arunachal Pradesh ( Rs. 2,516 cr ), in that order of the size of the grant. Now these seven Himalayan/mountain states have their peculiar problem of public order and political disability and understandably being in the North Eastern part of the country have severe infrastructural constraints and problems and these are arguably justifiable grounds for being accorded post-devaluation grants for meeting their Non Plan revenue deficits.

 

But, Himachal doesn't have either the geographical isolation or political instability grounds in its favour i.e. of the kind one encounters in the North Eastern India, then why such a heavy dose of grants to address NPRD ? One ground, often put forward, is that it has invested heavily in the social-economic infrastructure and hence requires a corresponding 'maintenance and support' grant assistance. What about the reduction in mis-targetted subsidies, cost-recovery revenues e.g. service charges, cess, surcharge and other levies which should have been revised and levied at the market rate or on cost-realization basis ? Are these being levied fully, being revised periodically and whether these are being levied at all and there is no 'free-lunch'/subsidy regime ? Is this enormous size grant of post devolution NPRD a healthy indicator, does Uttarakhand has any lessons to draw from it ?    

 

The answers to these inconvenient questions is indeed provided by the Finance Commission report itself and by the very rubric of the Grant, Performance Incentive. Only three States, have been provided grant under this head, namely Uttarakhand ( Rs. 1,000 cr), Assam ( Rs. 300 cr ) and Sikkim ( Rs. 200 cr ), out of a total 28 and Uttarakhand's performance outpaces the other two candidates, as it is four times of the total Incentive given to the remaining two !  

This writer cannot do any better than reproduce what the Finance Commission says itself  ( Finance Commission, Vol I, Chapter XII, para 12.13, p 206 ):

 

Performance Incentive

 

12.13 Three special category states, Uttarakhand, Assam and Sikkim, received NPRD grants from FC XII to make up for their assessed deficits. Of these ,Uttarakhand, as a newly created state, received the NPRD grants for the first time during the period of FC XII. Assam has benefitted from the NPRD grants under all the Finance Commissions since FC I, except FC VII. Sikkim became a state of the Indian Union in 1975 and has received grants since FC VII onwards. After normatively assessing the revenues and expenditure of these three states, and taking into acount the devolution, these states are not found to be in need of NPRD grants any longer. In our view, this marks major progress by these three states, particularly in view of the known cost disabilities and other fiscal challenges that special category states face.       

 

In recognition of their efforts, says the Finance Commission, we recommend a performance grant as an incentive for them to continue " on their path of fiscal prudence, as indicated below:" For the first three years Uttarakhand has thus been recommended a Performance Incentive of Rs 400, Rs 300 and Rs 300 crores, or a total of Rs 1,000 crores.

 

Only into its tenth year and to be recognized as the top Fiscally Prudent State by an Expert Team known as the Finance Commission of India, according to this writer, is no mean achievement, by any standard. This writer certainly feels immensely proud to have also played a very humble part in this process of mainstreaming fiscal prudence; which consisted of a series of Institutional measures and other policy initiatives like implementation of VAT, Fiscal Responsibility Act, New Pension Scheme, all three in October 2005 and creation of Consolidated Sinking Fund and Guarantee Redemption Fund ( Reserve Bank of India, State Finances, 2009-10, A Study of Budget, page 8); and also  hopes that further innovative efforts would be made in future by augmenting painlessly, imaginatively and sensibly revenues from the capital investments made in the past, say in forest and various departmental guest-houses, curtailment of wasteful subsidies through closures of 'grant-guzzling government gardens', loss-making Corporations, TRCs  etc.; ensuring that all these pay at least for their maintenance and upkeep; re-orienting various public service sectors in infrastructure like transport, tourism and eco-tourism in self-sustaining modes and keeping non-plan non-productive expenditures like in 'regular policing' etc down by continuing to involve the stake-holders themselves even in peace-keeping and law and order operations ( revenue police ). Strictest avoidance of extremely unsustainable public services and heavy non-plan expenses in salary and capital expenditure by outsourcing on contract and a drastic cut in the regime of 'free-lunches and free-bees' is something, where we need not emulate our esteemed neighbour. States also have to be run like efficient and self sustaining Corporations where every paise of tax money is made to give a bigger bang to its share-holders, the citizens. Indeed, all past efforts have to be viewed in this light, constantly re-inventing over-all governance.  Well done, Uttarakhand, keep it up !

 

In passing, it also deserves to be put on record, that perhaps Uttarakhand also has the distinction of having put in practice the principles of public private partnership in various projects when the rest of the country was just being informed about it. If the Bamboo Board and the Bio-fuel Board and the corresponding Missions these two carry forward are not first generation PPP, then pray what is ? Just check out . Turai Seeds & Development Corporation, the way it produces seeds through thousands of farmers, setting international standards, would have been  a prize show-piece anywhere, but in Uttarakhand ! Looks like what Uttarakhand does today, India takes up tomorrow  –  No ?

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