Release Rs 11,185 crore GST due to TN: PTR tells Centre

CHENNAI: State Finance Minister Palanivel Thiaga Rajan on Friday urged the Union Government to release Rs 11,185 crore GST arrears due to the State and extend the GST compensation period by another two years as states are yet to recover from the gap between revenue realisation and guarantee revenues under the GST Act.

Presenting the State’s views at the pre-union budget meeting chaired by Union Finance Minister Nirmala Sitharaman in New Delhi this morning, Thiaga Rajan said that the wide gap between the actual revenues realized and the guaranteed revenues protected by the (GST) Act was further exacerbated by the Covid pandemic and the State’s revenues are yet to recover fully. “Considering the revenue shortfall that is expected, I urge the Union Government to release the pending compensation dues of Rs.11,185.82 crore at the earliest, which is pending due to certain procedural formalities. I also request that the GST compensation period be extended by at least two more years,” he added.

Increasing levy on cesses is antithetical to fiscal federalism

Describing the continuous increase in the levy of cesses and surcharges by the Centre as antithetical to the spirit of fiscal federalism, PTR reiterated that the cesses and surcharges, which do not form a part of the divisible pool of taxes, as a percentage of gross tax revenue have increased manifold from 10.4% in 2011-12 to 26.7% in 2021-22. Remarking that it has deprived the States of their legitimate share of revenue collected by the Union, he exhorted the Union government to merge the cesses and surcharges into the basic rates of tax so that the States receive their legitimate share in devolution.

Also urging the Centre to provide greater ‘untied’ funding to the states, rather than a one-size-fits-all homogenisation through increasingly detailed Central Schemes, he asked the Centre to ensure that State Specific grants are released in full without imposing any conditions, respecting the convention wherein the recommendations of the 15th Finance Commission are treated as an award.

Drawing the Centre’s attention to the National Disaster Management Authority not realizing Rs 500 crore recommended by the Commission for reducing urban flooding in Chennai for 2021-22 to 2025-26 period even after a lapse of 2 years, PTR requested the Union Government to ensure earliest release of the earmarked amount for Chennai.

Sanction CMRL Phase-II as 50:50 equity share project: Operate Vande Bharat from Chennai to Kovai, Madurai

The State Finance Minister also sought the centre’s sanction for hasty implementation of several key projects in the state like CMRL Phase II and AIIMS in Madurai. Asking the Centre to immediately sanction the CMRL Phase-II project as a 50:50 equity share between the GoI and GoTN and ensure adequate provisions are made in the Union Budget 2022-23, he also pressed for operaiton of Vande Bharat Express trains from Chennai to Coimbatore and Madurai.

Other demands:

He also asked the Centre to sanction of the following railway projects in Tamil Nadu in the upcoming Budget:

(i) Tambaram - Chengalpattu 4th line - Rs.600 crore.

(ii) Attipattu - Gummidipoondi 3rd and 4th lines - Rs.500 crore.

(iii) New line from Tirupattur – Krishnagiri - Hosur - Rs.1,486 crore.

(iv) Doubling of Arakanom - Kanchipuram Chengalpattu line – Rs.1,360 crore.

Expedite the establishment of All India Institute of Medical Sciences (AIIMS) at Madurai.

Form a dedicated team of officers with adequate financial and administrative powers to expedite the construction work for establishment of a full-fledged AIIMS at Madurai.

Enhancement of unit costs to reflect the present-day requirements and increase its proportion in Centrally Sponsored Schemes.

Follow the original sharing pattern (49% each by Centre and State) that was followed before 2020-21 from the next financial year for the PM Fasal Bhima Yojana Scheme.

Enhance the allocation under ‘Rural Infrastructure Development Fund’ (RIDF) of NABARD, the ‘Dairy Processing and Infrastructure Development Fund’ (DIDF) and ‘Fisheries and Aquaculture Infrastructure Development Fund’ (FAIDF) in the upcoming Union Budget.

Share the available datasets under various schemes and projects with the States so that data can be effectively used for better governance.

Reduce the duties on imported wood to attract investment in this important sector.