Raipur, 12 November 2021.
Chief Minister Shri Bhupesh Baghel has written a letter to the Union Finance Minister Smt. Nirmala Sitharaman to provide more financial resources from the Center in the interest of the state, to improve the parameters of revenue deficit grant on the basis of current circumstances, to make GST compensation grant even after June 2022. To continue for five more years, cancellation of coal block allocation has urged the state to make available an amount of Rs.4140 crore payable to Chhattisgarh at the earliest. He has urged the Union Finance Minister to allow Chhattisgarh to make bioethanol from paddy at the earliest, reduce the cess on petrol and diesel by the Center and increase the center share in central schemes.
Chief Minister Mr. Baghel has written in the letter that the state governments have limited financial resources. Due to Kovid, there has been a big reduction in the income of the state in the last two years, due to which the state is facing immense difficulties in the operation of public welfare schemes. The Chief Minister, while explaining the main reasons for the economic difficulties of the state of Chhattisgarh and the points of demand of the state, has written in the letter that on the recommendation of the 15th Finance Commission, revenue deficit grant is being given to such states, which are working from the year 2020-21 to 2025. Have been in continuous large revenue deficit for 5 or more years prior to -26. If this grant is being given to the states for the purpose of recovering from bad financial condition, So it should be given on the basis of reimbursement of revenue deficit in the period 2020-25, instead of considering the revenue deficit of the previous years as the basis. Prior to doing this, the states which were following financial discipline, but at present the economy affected due to Kovid-19 and the revenue deficit situation due to reduction in revenue receipts due to the anomalies of the GST tax system, will also get the benefit of this grant. would be able to. Therefore, we demand that the criteria for giving revenue deficit grant should be reconsidered in the light of the present circumstances and necessary changes should be made so that the state of Chhattisgarh which follows financial discipline can also get its benefit.
Mr. Baghel has written that according to the present system, the states which have suffered loss of revenue after the implementation of GST tax system, there is a provision to give compensation grant for only five years from July 2017 to June 2022. The state is estimated to get reimbursement of about 6,500 crores in the GST compensation item in the current financial year, but in the coming financial year 2022-23, this amount will be received from the center only till the first quarter (April to June), which will be about 1,700 crores. . Thus, in the coming year, no arrangement has been made by the Center to compensate the loss of revenue of about Rs. 5,000 crore to the state, whereas the attention of the 15th Finance Commission and the Central Government has been drawn by us in the past as well. This is a big economic loss for a productive state like Chhattisgarh. Whereas, being a producer state, the contribution of the state in the development of the country’s economy is much higher than the states which have been benefited in the GST tax system due to higher consumption of goods and services. Therefore, it is requested that the GST compensation grant should be continued for the next 5 years even after June 2022 or any permanent option to compensate the revenue loss to the producing states like Chhattisgarh should be done at the earliest so that the process of making the annual budget for the year 2022-23. to be completed seamlessly. Those who have benefited in the GST tax system due to higher consumption of goods and services. Therefore, it is requested that the GST compensation grant should be continued for the next 5 years even after June 2022 or any permanent option to compensate the revenue loss to the producing states like Chhattisgarh should be done at the earliest so that the process of making the annual budget for the year 2022-23. to be completed seamlessly. Those who have benefited in the GST tax system due to higher consumption of goods and services. Therefore, it is requested that the GST compensation grant should be continued for the next 5 years even after June 2022 or any permanent option to compensate the revenue loss to the producing states like Chhattisgarh should be done at the earliest so that the process of making the annual budget for the year 2022-23. to be completed seamlessly.
The Chief Minister has written in the letter that the allotment of 215 coal mines across the country was canceled by the order passed by the Supreme Court in the year 2014. In the same order, a penalty of Rs 295 per tonne was imposed on the companies to whom these coal blocks were allotted, which were deposited by the companies with the Central Government. This amount should be allocated to the states, from this Chhattisgarh will also get Rs 4,140 crore. Our demand is that this amount should be given to the state soon.
In the letter, Mr. Baghel has written in relation to the permission to make bio-ethanol from paddy/rice that- Due to surplus production of paddy in the state of Chhattisgarh and not getting the requisite cooperation of the central government in the disposal of paddy, the state has to suffer huge loss every year. It falls. State’s industrial policy to encourage production of bioethanol from surplus paddy, Biofuel has been included in the list of high priority industries under 2019-24 and a special incentive package has been announced for this. As a result of this, MoU has been executed with 08 private investors in the state to produce more than 12 crore liters of ethanol per year. Due to this, about 5 lakh metric tonnes of surplus paddy will be consumed. For this the consent of the Central Government is necessary. It is requested that immediate permission should be given to make ethanol from grain and to avoid ‘national loss’ due to spoilage of paddy and huge economic loss to the state.
In relation to the permission to purchase Usna rice, the Chief Minister has written that- In the current Kharif marketing year 2021-22, the Food Corporation of India has decided to take 61.65 lakh metric tons of Arva rice from Chhattisgarh, whereas in the previous years, mostly Usna rice from the state. It has been taken only because paddy produced in the state is mostly used to make rice of that quality. This will make it very difficult to make Arava rice. At present, there are 418 registered millers of USNA in the state, whose monthly milling capacity is 5.95 lakh metric tonnes. If that rice is not taken by FCI, then due to non-utilisation of this monthly milling capacity, there will be delay in disposal of paddy. This will create a situation of spoilage of paddy, Which will be a national loss of food grains as well as the state. With this, thousands of laborers working in those mills will become unemployed. That rice is being taken from many other states of the country. We demand that Chhattisgarh should also be given a target of taking at least 24 lakh metric tonnes of Usna rice by FCI.
Regarding the share of the state in the central taxes, Mr. Baghel has written that – at present 42 percent of the collection of central taxes is being given to the states on the recommendation of the 15th Finance Commission. Out of the above 42 percent, the share of Chhattisgarh state is 3.408 percent, the amount received by the state in comparison to the central taxes provisioned in the Union Budget in the last 3 years is as follows-
Thus, Chhattisgarh has received less than Rs 13,089 crore as against the amount allocated for transfer in the Union Budget, which has created a lot of pressure on the state’s resources. As against 42 per cent of the state’s share of revenue, only 34 per cent has been received.
In the letter urging the Center to reduce the cess on petrol and diesel instead of reduction in central excise duty, Mr. Baghel has written in the letter that from November 02, 2021, the excise tax on petrol and diesel has been increased by Rs.05 respectively by the Center. (15 percent) and 10 Rs. (31 percent) After deducting per liter, there will be an average reduction of 23 percent in Central Excise duty from these products. Apart from this, due to the reduction in the net selling price of these products as a result of the above deduction, a total of Rs 800 crore per year in VAT collection imposed on it by the state. shortage is likely. Therefore, in place of Central Excise Duty on Diesel and Petrol, the amount of Cess imposed by the Center is proposed to be abolished/reduced.
In relation to the amount of central share in central schemes, the Chief Minister has written that in the year 2014-15, the state received Rs 7,658 crore in central schemes and against it the state share was 2,622 crore, that is, the average ratio of center share and state share was 75:15. Whereas in 2021-22, the central share in central schemes is 9,794 crore and state share is 5,592 crore, which is an average ratio of 64:36. Thus, there has been an average reduction of 11 per cent in the central share in the central schemes and this burden is increasing the economic burden on the state in the form of state share. The details of percentage reduction in central share in some major centrally sponsored schemes are as follows-
The Chief Minister has written in the letter that it is clear from the above description that despite having statutory powers, the state is facing financial difficulties due to various reasons. It will not be possible to implement the schemes being run for the welfare of the poor, laborers, farmers, women and other sections of the society in the state. The Chief Minister has written requesting the Union Finance Minister to take necessary action to provide financial resources to the state according to the judicial interests of the state.
