Coronavirus impact: Amit Mitra writes to FM Sitharaman, demands GST dues

Other states also want immediate release of compensation.

Facing aggravated fiscal woes due to the lockdown, states have demanded an immediate release of their pending goods and services tax (GST) dues by the Centre, besides a hike in the borrowing limit. To tide over the crisis, states have sought an increase in the fiscal responsibility and budget management (FRBM) limit to 4 per cent, from 3 per cent.

With over four months of GST compensation of more than Rs 40,000 crore still pending, some states even plan to drag the central government to the Supreme Court.

West Bengal Finance Minister Amit Mitra wrote a letter to Union Finance Minister Nirmala Sitharaman on Thursday, urging for an immediate release of pending compensation dues.

Compensation cess, to be released on a bi-monthly basis, is pending for about five months. The central government had released 65 per cent of the compensation due for October and November. The central government is of view that it will only release compensation out of what has been collected by way of levy of cess on luxury and sin items like automobiles, tobacco, and aerated drinks.

“The spread of Covid-19 has created a havoc to the state finances... non-receipt of GST compensation from the central government has further aggravated the already stretched state finances,” Mitra said in the letter. West Bengal's pending dues of Rs 2,875 crore include compensation for some part of October and November and months till March.

Mitra said a “serious cash management situation and fiscal problem” would arise in the coming months with GST revenues, which contribute up to 70 per cent of the state's revenues, getting locked up due to deferment of GST return filing dates.

States have demanded an increase in borrowing limit even if fiscal deficit reaches 4 per cent of state GDP, against the norm of 3 per cent, with most states planning to front-load the exercise to the first quarter of FY21.

Kerala rains: Kerala on 'yellow alert, IMD predicts heavy rains on September 25'

The State Disaster Management Authority has instructed district authorities to be on alert and directed them to take necessary precautions.

Kerala Floods : Kerala, the State where the devastating rains, floods and landslides have taken a toll of hundreds of people, resulting in loss to the tune of over Rs 300 billion, is expected to receive heavy rainfalls on September 25, said the State government.

"Met department has predicted heavy rain (64.4mm to 124.4mm) in the districts of Pathanamthitta, Idukki & Wayanad districts for September 25. Moreover, yellow alert has been issued for Palakkad, Idukki, Thrissur and Wayanad districts for 26th," said Kerala Chief Minister Pinarayi Vijayan on Twitter.

These districts were among the worst affected during the recent deluge.

The State Disaster Management Authority has instructed district authorities to be on alert and directed them to take necessary precautions, he added.

According to the Indian Meteorological Department (IMD) forecast, these districts are most likely to see heavy rains. Yellow alert is a warning colour code, which indicates the situation has to be watched and updated, while the next levels are orange and red, which respectively indicates 'Alert' (be prepared) and 'Warning' (Take Action).

Kerala had seen heavy rains, flood and landslides during the monsoon since the beginning of June, till the last week of August, disrupting normal life in at least 12 out of 14 districts. This resulted in an irreparable loss to thousands of people. These 12 states were on red alert for several days continuously.

The recent floods have taken the lives of 483 individuals, while 14 went missing and around 140 people were hospitalised. On August 21 alone around 14,50,707 individuals from 3,91,494 families were in relief camps, according to the official records.

The State has been in an effort to raise funds and rebuild the infrastructure. A central team is visiting the State to take stock of the losses and the State government is expected to submit its request for central assistance for both the losses and to rebuild the State. It has also sought the government officials to contribute a month's salary to the relief fund, in a Salary Challenge, which has also become a controversy as there were allegations that the State government is pressurising the government officials to pay the amount.

Chief Minister Pinarayi Vijayan, who arrived here on Sunday from the US after completing his treatment for an undisclosed ailment, urged Malayalees in the US to contribute liberally to rebuild the flood-hit state and said he hoped Rs 1.5 billion would be raised from them.....Read More

Businesss Standard