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Center Releases State Funds

Union Government has opened its Central Kitty to release funds for the State as the State Government is fighting Novel Corona Virus (COVID-19) Pandemic steadfastly, officials admit.

Now funds flow from the Central Government has been eased as revenue generation in the State has gone down drastically.

While the State Government is facing fiscal stress due to COVID-19 Pandemic, Central Government has come to its recue, senior officials in the State Government admit.

Take for example, the Ministry of Finance has released State Share of Central Taxes and Duties for April and has promised to release the share for the month of May in time.

As per Fifteenth Finance Commission (FFC) recommendation, the State Government is to receive 41 Percent of Central Taxes.

Sources said Ministry of Finance has already released Rs.2100 Crore to Odisha towards its share of Central Taxes and Duties for the month of April.

Similar amount will be received in the month of May and this time there is hardly any delay in release though Union Government is facing financial hardship due to poor revenue generation.

Union Government is reportedly going for market borrowing to pay the State Governments their share, senior officials say.

Rs.46,038 Crore has been released to the State Governments as their share of Central taxes and Duties for April.

Similarly, Union Government has also released its share of the State Disaster Response Mitigation Fund (SDRMF), said sources.

Odisha is a natural disaster prone State and it is spending huge sums for relief and rehabilitation measures, thanks to continuous natural disasters hitting the state at regular interval.

Union Government has already released Rs.17,287 Crore to various States including Odisha on account of its share of the SDRMF.

COVID-19 is the first pan India biological disaster being handled by the legal and constitutional institutions of the country. The current lockdown has been imposed under the Disaster Management Act, 2005 (DM Act).

So Centre released its share to the States, so that they can utilize the funds to contain COVID-19 Pandemic.

However GST Compensation, which was to be released by the Union Government, is yet to be received by the State Government. In every two months, Centre releases GST compensation to the States.

Odisha is yet to get compensation for February and March, officials admit.

In fact GST Collection in the country has nosedived due to COVID-19. While monthly collection of GST in the Country crossed Rs.1 lakh Crore, it has nosedived to Rs.28,000 Crore, officials say.

Similar is the situation in Odisha also. While in April-2019 State GST collection was Rs.900 Crore, it has gone down to Rs.360 Crore in april-2020, they admit.

So it is understandably as Centre is getting much less GST, release of State’s compensation is naturally being delayed, but it will come soon, officials say.
 


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