Finance Ministry Releases Rs 45,000 Crore to States as Additional Devolution on Buoyant Q4 Revenue Mop-up

The Finance Ministry on Thursday said it has released Rs 45,000 crore to the states as additional devolution in the 2020-21 fiscal following revenue buoyancy in the March quarter. As per the Revised Estimates for 2020-21, Rs 5,49,959crore, being 41 per cent of the shareable pool of taxes and duties were estimated to be released to the states.

However, the Finance Ministry has devolved an amount of Rs 5,94,996 crore, based on the initial estimates of the shareable pool that would be collected in 2020-21, the ministry said in a statement. The 15th Finance Commission has recommended that the states be given 41 per cent of the divisible tax pool of the Centre during the 2020-21 fiscal.

The ministry said the additional amount of Rs 45,000 crore was released in two instalments of Rs 14,500 crore and Rs 30,500 crore. Rs 14,500 crore was released along with the 14thregular instalment of devolution on March 26, 2021, whereas the second instalment of Rs 30,500 crore was released to the states on March 31, 2021. “The Ministry of Finance has released these amounts to share the revenue buoyancy seen in Q4 2020-21 and in the true spirit of fiscal federalism,” it added.

Separately, the Department of Expenditure under the Finance Ministry, has released Rs 11,830 crore to states under the ‘Special Assistance to States for Capital Expenditure’ scheme. The schemewas announced by the Finance Minister on October 12, 2020, as part of the Aatmanirbhar Bharat package. The scheme is aimed at boosting capital expenditure by the state governments who were facing a difficult financial environment in the year 2020-21 due to a shortfall in tax revenue arising from the COVID-19 pandemic.

Capital expenditure proposals of Rs 11,912 crore of 27 states were approved under the scheme by the Department of Expenditure. The capital expenditure projects have been approved in diverse sectors of the economy like health, rural development, water supply, irrigation, power, transport, education, urban development, the ministry added.

Source link

Leave a Comment