Amid slowdown, K Chandrasekhar Rao tells Centre to pay up

Hyderabad: Chief Minister K. Chandrasekhar Rao on Saturday wrote to Union finance minister Nirmala Sitharaman seeking the release of Rs 4,531 crore of GST arrears, as the state government is suffering a shortfall in tax devolution.

Mr Rao said that according to the Union Budget, the tax devolution to Telangana state was 19,719 crore. The state government had received Rs 10,304 crore till November, which is less by Rs 224 crore when compared with the same period last year.

Mr Rao said that with the further slowdown of the economy during the second quarter, it is likely that the tax devolution to the will fall even more. Mr Rao said that because of the slowdown there was a shortfall in GST collections compared to the benchmark growth of 14 per cent, and an amount of Rs 1,719 crore was due as compensation as mandated under the GST Act.

He said, “we have received compensation for the first four months and the balance is due. The IGST settlement was done during 2017-18 based on the tax devolution of the Finance Commission instead of the formula adopted for IGST settlement. This has resulted in a shortfall of `812 crore and the same was pointed out by the CAG in his report (Report No 11 of 2019).”

Prior to writing to the Union finance minister, the Chief Minister held a review meeting on the state’s financial position, funds to be received from the Centre and other issues.

After the review, Mr Rao said, “the Union government is making tall claims on a daily basis both in Parliament and outside that there is no effect of the economic slowdown but the facts are quite different. In this review meeting, the actual financial situation and hard-hitting facts have emerged.”

A press statement from the Chief Minister’s Office quoted Mr Rao as saying, “There is no match between what the Union ministers are proclaiming in Parliament and the ground realities. This is very surprising. If this situation continues, the state’s financial position may turn into grave. It is like a person losing his clothes when he is asking for a morsel of food.”