Centre paying 49% tax owed to states: FM Sitharaman in Lok Sabha

Mangalore Today News Network

New Delhi, Sep 19, 2020: Finance Minister Nirmala Sitharaman responded to the discussion on Supplementary Demand for Grants in the Lok Sabha on Friday.

 

"This is probably the first time that this kind of amount has been ever pitched in a supplementary demand because the gross additional expenditure of 2,35,852 crores with a net cash outgo of Rs 1,66,983 crore is probably the highest that budgets have seen in this country," the finance minister said at the beginning of her response.

Following remarks and suggestions from as many as 25 MPs over the Appropriation Bill, 2020 which authorises Supplementary Demand for Grants for 2020-21, the Finance Minister told the Lower House of Parliament, "Additional resources sought under this first supplementary demand for grants is largely going for people-centric activities and they are going through some of the government’s most critical schemes."

She pointed out that an additional demand of Rs 40,000 crore for the MNREGA scheme (above Rs 61,500 crore Budget allocation) is one of the key elements of this scheme. Sitharaman told the Lok Sabha, "It touches 1 lakh crores. Through MNREGA highest ever spent is happening."

Responding to concerns about Centre’s non-payment of dues to states, the finance minister said, "Centre’s gross tax revenue in 2019-20 (April-June) was Rs 5,39,068 and this year 2020-21 (April-July) was Rs 3,80,00 crore because of the lockdown. Devolution for states is done from this revenue."

This means that Centre’s gross tax revenue fell by 29.51 per cent this time around, Nirmala Sitharaman said. She went on to add that in the last fiscal, Centre’s tax devolution to states was Rs 1,99,000 crores whereas the devolution this year is Rs 1,76,009 crore which indicates that 49 per cent of total gross revenue as compared to 41 per cent of tax devolution last year has been paid to states.
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She also shed light on total transfer to states (tax + grants) saying, "We have given with an increase of 19 per cent. "Total transfer to states exceeds Centre’s Gross Tax Revenue," Sitharaman stated. "This means that I collected Rs 100 as gross tax but have given Rs 107 to states," the finance minister told the Lok Sabha.

Whatever the Centre is keeping for its own expense is borrowed, FM Nirmala Sitharaman said adding, "The extra Rs 7 given to states on each Rs 100 collected as tax is also borrowed.

"We have never had USD 537 BN forex reserves, which is the 19-month equivalent of imports," Sitharaman said in her response to the lower house on Friday. She also said that FDI inflows in India stand at USD 4.4 BN.

The finance minister also pointed out that 10-12 lakh new DMAT accounts were opened during the lockdown as compared to six lakh new accounts per annum in previous years.

In her statement, FM Sitharaman also said that each Jan Dhan account holder is getting Rs 500 in their accounts for three months, 5 kg ration till November, free cooking gas, and health insurance worth Rs 5 lakh under Aayushmaan Bharat.

"If there were no Jan Dhan accounts, this money would also not have reached those in need," the minister said pointing out that earlier 16 paise in a rupee was being transferred but now the entire amount is reaching the accounts as part of Direct-Benefit Transfers (DBT).

She went on to address concerns about the middle-class, talking about a special window for affordable and middle-income housing. As part of this window (Rs 1,366 crore) if projects, where people bought homes, have been deferred, money will be given to the developers to complete.

The FM also mentioned a special window of Rs 500 crore for the Pradhan Mantri Matsya Sampada Yojana aimed at reducing infrastructural gaps in the fisheries sector. Another window of Rs 745 crore for pensioners, a micro-credit facility for street vendors, a window of Rs 13,278 crore for free LPG under the scope of the Petroleum Ministry were some of the other allocations mentioned by Finance Minister Nirmala Sitharaman.

"8.3 crore poor families received one-time cash transfer of Rs 1,000 and free gas cylinders while another 3 crore senior citizens got Rs 1,000 as a one-time payment in their accounts," she said. The minister also said that 20 crore women were recipients of Rs 500 in their Jan Dhan accounts.

She mentioned that wages under MNREGA have been increased from Rs 182 per day to Rs 202 per day.

Centre is not contemplating increasing taxes to compensate loss in revenues due to Covid-19 pandemic, the minister added.

Responding to states’ demands for GST dues, Nirmala Sitharaman said, "Centre not reneging from responsibility as far as GST compensation to states is concerned."

While stating that the issue of GST compensation to states will be discussed in GST Council, the Union finance minister also said that the Attorney General has opined that GST dues will not be compensated from the Consolidated Fund of India and there is no provision in the GST Act for the same.



courtesy: IndiaToday