CM writes to Union Finance Minister to release pending funds

Chief Minister K. Chandrasekhar Rao reviewing financial situation of the government with officials in Hyderabad on Saturday.

Chief Minister K. Chandrasekhar Rao reviewing financial situation of the government with officials in Hyderabad on Saturday.   | Photo Credit: Arrangement


State situation grave, says Chief Minister

Chief Minister K. Chandrasekhar Rao has directed the Finance Department to reduce the allocation of funds to all the departments uniformly in view of the shortfall in the State’s share of Central taxes during this financial year and pending GST dues from the Centre.

He also has written to Union Finance Minister Nirmala Sitaraman to release the State’s share of Central taxes as announced in the Union Budget or state the factual position prevailing in the country.

The Chief Minster is considering meeting the Prime Minster and Union Finance Minister in the next one week along with team of State officials and represent to them that the State could face grave situation if the funds due to the State from the Centre were not released. He directed the Finance officials to prepare a comprehensive note and circulate it in the State Cabinet meeting on December 11. He wanted the Ministers and officers to observe fiscal prudence in line with the prevailing financial situation of the State.

Mr. Rao mentioned in his letter that the State government has so far received only ₹10,304 crore towards its share in the Central taxes in the last eight months of the current financial year of 2019-20. This is less than the ₹10,528 crore devolved to the State in the corresponding period of last financial year 2018-19.

Lower amounts

Thus State received ₹224 crore less than the amount it had received in the eight months of the last fiscal. Interestingly the Centre in its Union Budget said it would release ₹19,719 crore towards the State’s share in the Central taxes for 2019-20, an increase of 6.2 % over ₹16,451 crore received by the State during the last financial year.

But the devolution to the State so far this year was less by 2.13 % than what was released in the corresponding period last year . This is in total contrast to the claims of the Union government in Parliament and outside that there was no major impact of slowdown on the country, Mr. Chandrasekhar Rao said.

The decline in the funds received by the State from the Centre was reviewed by the Chief Minister in a meeting held on State’s financial situation and funds due to the State from the Centre here on Saturday. There was a shortfall of ₹924 crore to the State from its share of Central taxes.


In addition to this, he said that because of the slowdown, there was shortfall in GST collections compared to the benchmark growth of 14 % and ₹1,719 crore was due as compensation as mandated under the GST Act. Under the IGST settlement, Centre owed ₹2,812 crore for the year 2017-18. Thus total ₹4,531 crore of GST funds were due to the State.

State Finance Principal Secretary K. Ramakrishna Rao went to Delhi recently and represented to the Central officials that State got 8.3 % less in their share from the Central taxes. However the Central officials indicated that the situation was not encouraging and the shortfall could actually fall to 15 % and the shortfall could be of ₹2,957 crore for this financial year.

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Printable version | Jan 25, 2020 12:55:25 AM |

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