New Delhi: The Centre transferred as much as 110 per cent of the total tax collection to states in April against 41 per cent mandated by the 15th Finance Commission, Expenditure Secretary T V Somanathan said amidst complaints from states that they are yet to receive their share.
Govt shared data Sunday which show that as much as Rs 46,038 crore was transferred to states last month.
Somanathan said that this was done leaving budget estimates unchanged for the current year which means states were actually owed just Rs 17,159 crore.
This also suggests that the Centre’s tax collection in April totalled Rs 41,853 crore. The gross tax collection in April 2019 was Rs 1.21 lakh crore.
“But now we know the revenues are going to fall short and in spite of that we have kept the devolution unchanged, and actually paid 110 per cent from what we earned (in taxes),” Somanathan told a news website.
As the states were already reeling under the pandemic financially, the govt decided not to cut the devolution to states. “The hike in taxes on fuel will only partially fill the huge gap in revenue due to pandemic. There is a massive drop in central GST, income tax and customs,” he added.
The sum transferred to states will not include the GST compensation cess. The delay in payment is due to inadequate collections through compensation cess. Moreover, timeline extension in GST payments and limited collection during the lockdown will delay the process further.
The total expenditure incurred by the government in the ongoing fiscal year will be funded in part by borrowing and reprioritisation, he said. The borrowing target has been increased from Rs 7.8 lakh crore to Rs 12 lakh crore.
PNN & Agencies