Centre releases Rs 17,287 crore to states
New Delhi: The Union government on Friday released Rs 17,287 crore to the states a day after meeting Prime Minister Narendra Modi in a video conference on which cash-strapped states urgently sought funds to combat the disease coronavirus (Covid-19) pandemic and its aftermath.
The funds included a Rs 6,195 crore a revenue deficit grant to 14 states, meant to cover the gap between their revenue and expenditure. The states are Andhra Pradesh, Assam, Himachal Pradesh, Kerala, Manipur, Meghalaya, Mizoram, Nagaland, Punjab, Sikkim, Tamil Nadu, Tripura, Uttarakhand and West Bengal, finance minister Nirmala Sitharaman said in a tweet.
“The remaining Rs 11,092 crore is to all States as advance payment of Central share of 1st instalment of SDRMF [State Disaster Risk Management Fund],” she wrote.
“The @FinMinIndia today released a total of Rs 17,287.08 crore to different States to enhance their financial resources during the #COVID19 crisis. This includes Rs 6,195.08 crore on account of ‘revenue deficit grant’ under 15th Finance Commission recommendations to 14 States,” she tweeted.
State governments on Thursday raised the issue of paucity of funds in fighting Covid-19, an official aware of the matter, said requesting anonymity. Hindustan Times reported about states’ demand for funds in its Friday edition.
An official of the West Bengal government welcomed the move, but sought the payment of the Goods and Services Tax (GST) compensation,meant to offset a shortfall in GST collections, to states in this time of crisis. In a letter to Sitharaman, West Bengal finance minister Amit Mitra on Thursday asked the centre to immediately release Rs 2,875 crore outstanding GST compensation to the state.
“You are aware that the spread of Covid-19 pandemic has created havoc to the state finances. Business activities have been hit badly, severely impacting the revenues of the state. You would appreciate that under these circumstances, non-receipt of GST compensation from the Central Government has further aggravated the already stretched State finances,” Mitra said in the letter, a copy of that has been reviewed by HT.
According to the letter, the GST compensation is due for the period from October 2019 to March 2020. The total compensation payout to the states in 2019-20 is expected to be over Rs 1.20 lakh crore while total collection from GST compensation cess was less than Rs 80,000 crore, officials aware of the matter said.
The GST law assures the states a 14% increase in their revenue for five years and the Centre is committed to meeting any shortfall in revenue through the cess levied on luxury goods and sin products such as liquor, cigarettes and other tobacco products.
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