Finance Minister Nirmala Sitharaman has said that the Centre will release 95 thousand 82 crore rupees as tax devolution to States in the current month after including one advance instalment to help them push their capital expenditure. Briefing media in New Delhi after interacting with Chief Ministers, Deputy Chief Ministers, Finance Ministers of States and Lieutenant Governors of Union Territories, Ms Sitharaman said, with this, states will have more money and they can consider spending it for infrastructure creation. States requested that it would be helpful for them if the tax devolution is front-loaded, she added.
The Minister further adds, the context of the meeting was that after 2nd wave of Covid-19, the country is witnessing robust growth and it is the time, the Government is looking at ways to sustain growth and take it to double digits.
In her opening remarks in the meeting, the Finance Minister highlighted that with the favourable international perception of India’s growth and in light of the structural, sectoral and financial, reforms undertaken by the Centre, global and domestic investors are upbeat about the investment attractiveness of the country. She said States should leverage this opportunity to scale up investments and growth. Also urged states to help India become the fastest growing economy in coming years, through facilitating investment attractiveness and expediting ease of doing business measures.
Replying to a query, Finance Secretary TV Somanathan said, the devolution was done in 14 instalments. He said, states had high cash balances at 2.66 lakh crore rupees as of 30th October, but four states had negative cash balances.
During the meeting, the Finance Ministry dismissed the States concerns that the recent excise duty cuts on petrol and diesel will be from the shareable pool of taxes. Replying to a media query at the press briefing, Mr Somanathan said, the entire reduction of 10 rupees and 5 rupees per litre of diesel and petrol, is from the non-shareable portion of excise. He said it means the entire reduction is borne by the central government and there is no revenue loss to the States because of it.