Uttarakhand State Budget 2007-08 Analysis

Key Highlights

• Uttarakhand's total expenditure in 2007-08 was approximately Rs 14,500 crore, reflecting the fiscal profile of a state barely seven years old since its creation from Uttar Pradesh in 2000.
• Revenue receipts stood at around Rs 12,200 crore, with central transfers constituting nearly 55% of total revenue as the state retained special category status.
• Own tax revenue reached approximately Rs 3,800 crore, driven primarily by VAT collections from the Dehradun-Haridwar industrial corridor that had attracted firms through generous tax holidays.
• The state's pharmaceutical and IT cluster in Selaqui and Haridwar contributed significantly to commercial tax receipts, benefiting from the central industrial package announced in 2003.
• Capital expenditure was approximately Rs 3,200 crore, focused heavily on road construction across the hill districts where connectivity remained extremely poor.
• Education spending at Rs 2,800 crore addressed the challenge of running schools in scattered hill settlements with populations as low as 50-100 persons.
• Tourism infrastructure received Rs 450 crore as the state positioned itself as India's premier spiritual and adventure tourism destination, leveraging Rishikesh, Haridwar, and the Char Dham circuit.
• Hydropower development allocation of Rs 600 crore targeted small and medium projects, with the state's estimated potential at 25,000 MW largely untapped.
• Health sector spending at Rs 1,200 crore grappled with the challenge of providing medical services in remote hill areas where winter snowfall isolated villages for months.
• Agriculture and horticulture received Rs 900 crore, with apple orchards, off-season vegetables, and aromatic plants identified as high-value alternatives to subsistence farming.
• Rural road construction under PMGSY consumed Rs 800 crore as over 40% of habitations in the hill districts lacked all-weather connectivity.
• Chief Minister N.D. Tiwari's government prioritised the Dehradun-Mussoorie corridor for urban development, allocating Rs 350 crore for infrastructure upgrades.
• Revenue deficit was estimated at Rs 600 crore, within manageable limits given the special category state dispensation from the centre.
• The Fiscal Responsibility and Budget Management Act adopted by the state mandated a path toward revenue surplus by 2009-10.
• Disaster management received Rs 200 crore — a modest allocation for a state lying in seismic Zone IV and V, prone to landslides and flash floods.