This advance is intended to help states increase their capital spending, any adjustment will be made in March.
The Union government will release Rs 95,082 crore as tax devolution to states this month after including a down payment to help them increase their capital spending, Finance Minister Nirmala Sitharaman said on Monday 15 November. After a meeting with all the chief ministers and state finance ministers, Sitharaman said states have said it would help them if tax devolution is charged up front.
“I suggested to the Secretary of Finance that on November 22, instead of the normal rupee 47,541 crore, states receive an additional payment. Thus, rupee 95,082 crore will be paid to the states on November 22,” Sitharaman said. to reporters here. So with that, states will have more money in their hands so that they can consider spending it on building infrastructure, she added. Currently, 41% of taxes collected are spent in 14 installments and states have predictability of their cash flow, Finance Secretary TV Somanathan said.
This is an early version and all adjustments will be made in March, he added. “The background to the meeting was that after the second wave of Covid, we are seeing robust growth. However, this is also the time when we are looking for ways to maintain the growth and take it to double digits,” said Sitharaman.
The main purpose of the meeting was to seek ideas from states, as most issues related to investment development, as well as manufacturing and trade activities, are in the domain of states, she added. She added that the recently launched national monetization pipeline only includes central government assets and state assets are not under its jurisdiction at this time.
Sitharaman suggested that there is a large potentially cash-convertible asset base in states that could be tapped to improve the capital available for the creation of new infrastructure and other urgent social sector priorities, according to an official statement released after the meeting.
“Sitharaman urged states to help India become the fastest growing economy in the years to come, by making it more attractive to invest and accelerating ease of doing business and doing business. energy reforms, ”she said.
The Minister also stressed that, since in many cases land is one of the main bottlenecks for the establishment of projects, States should strive to facilitate the procedures for acquiring land and to create land banks to operate at the time of investment.
The meeting brought together the chief ministers of Assam, Chhattisgarh, Goa, Haryana, Himachal Pradesh, Karnataka, Madhya Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Tripura and Uttar Pradesh. Lt Governors of Jammu and Kashmir; Deputy Chief Ministers of Arunachal Pradesh, Bihar and Delhi. The ministers of state of Andhra Pradesh, Gujarat, Kerala, Odisha, Punjab, Rajasthan, Tamil Nadu, Telangana, Uttarakhand and West Bengal attended Monday’s meeting .
During the meeting, states also made certain recommendations to facilitate investments. These include the transparent investment facilitation mechanism which involves sharing with States, leads from potential investors who are in contact with the Union government.
States also called for a clear policy and SOPs on the environment and deforestation by the government of India, modeled on the “eco-economy” and more powers for states in matters of conservation. forests / environment.
They also highlighted the need to strengthen the dispute resolution mechanism, post-award contract enforcement and concession agreement models to strengthen the infrastructure PPP ecosystem.
Some states have also suggested introducing a policy for offshore wind energy, in addition to the continuation of the Union government loan program for capital expenditures beyond the current fiscal year.