Chief Secretary Highlights Development and Financial Challenges at 16th Finance Commission Meeting

Ranchi: During a meeting with the 16th Finance Commission held in Ranchi on Friday, Jharkhand Chief Secretary Alka Tiwari outlined the state’s pressing development and financial challenges. She aligned the discussion with the national vision set by the Prime Minister to transform India into a developed nation by 2047, emphasizing that inclusive and balanced growth across all states is vital to achieving this target.

Tiwari pointed out that despite being rich in natural resources, Jharkhand remains a low-income state. She described it as a classic case of the “paradox of plenty” and the “resource curse,” noting that around 30% of the state’s land is forested. As a result, most infrastructure projects require stringent forest and environmental clearances, causing delays and escalating project costs.

Jharkhand holds nearly 40% of the country’s total mineral reserves, but the state does not receive equitable economic returns. The Chief Secretary highlighted that coal companies owe significant dues in the form of land compensation and royalties. Moreover, the environmental and social costs—including land degradation, pollution, and displacement—are borne by the local communities, adversely affecting agriculture, health, and livelihoods.

She reminded the Commission that Jharkhand has historically been a manufacturing hub, with India’s first steel plant established in Jamshedpur. However, under the current GST regime, producing states like Jharkhand are at a disadvantage, with the state projected to incur a loss of ?61,677 crore between FY 2025-26 and 2029-30.

The state has a sizable tribal population—about 39% of its residents belong to Scheduled Tribes, Scheduled Castes, and Particularly Vulnerable Tribal Groups—who continue to lag in education, healthcare, and other key development indicators. The government is implementing several targeted programs, such as the “Maaiyan Samman Yojana” to promote women's empowerment and consumer-led growth, but these initiatives come with significant financial strain.

Tiwari also underscored that Jharkhand, formed in 2000, began its journey with substantial liabilities and financial responsibilities. Unlike other newly formed states, it was not granted special category status or financial aid packages. Additionally, the ongoing threat of left-wing extremism continues to impede the state's developmental progress.

She noted positive trends in revenue collection, with tax and non-tax revenues projected to grow by 16.5% from FY 2019-20 to 2025-26. Citing recent achievements, the Chief Secretary pointed out that Jharkhand ranks fourth among 18 general category states in the NITI Aayog’s Fiscal Health Index 2025. The government, she said, is committed to empowering Panchayati Raj institutions and local governance bodies and has requested increased central grants to further this mission.

In her recommendations, Tiwari proposed raising the vertical devolution of central funds to 50%. She also stressed the need to revise the horizontal devolution formula to better reflect factors such as population size, income disparities with more developed states, forest coverage—including both dense and open forest areas—and the revenue losses stemming from GST implementation.