Expect Rs 2K crore GST arrears by Dec 18: FM

Vijay C Roy
Tribune News Service
Chandigarh, December 4

The state is likely to get its arrears amounting to Rs 2,000 crore by December 18 out of the total Goods and Services Tax (GST) dues of Rs 4,100 crore from the Centre.

In an interaction with The Tribune, Finance Minister Manpreet Singh Badal said he pleaded the case along with finance ministers and representatives of other states to Union Finance Minister Nirmala Sitharaman regarding early release of GST compensation and arrears.

Besides Punjab, the Finance Ministers of Delhi, Puducherry and Madhya Pradesh and representatives of Kerala, Rajasthan, Chhattisgarh and West Bengal attended the meeting over delay in payment of compensation.

Punjab is awaiting Rs 2,100 crore as compensation while arrears stand at Rs 2,000 crore for August and September period.

“We are facing issues due to delay in compensation. We can’t close jails, schools and hospitals or cut spending on social security. Besides salaries, we have to pay pensions. So, we sought early release of the state’s compensation in a meeting with Union Finance Minister,” said Manpreet.

He added that the compensation for August and September had not been paid and post December 10, compensation for the period of October-November would also be due. “Including arrears, the total compensation the Centre owes us will be around Rs 6,000 crore,” he said.

“The Union Finance Minister said our arrears will be paid by December 18. As far as remaining dues are concerned, she has assured money will be released soon,” he added.

He added that if the state gets its outstanding dues which was around Rs 6,000 crore (including GST and arrears till November) from the Union Government, the state budget would be on the track as estimated.

The state’s total revenue receipt during April-October was Rs 34,900 crore, which was 5 per cent higher than the last year and 18 per cent lower than the budget estimates. As far total revenue expenditure was concerned, it was Rs 41,000 crore during the period. As the state cash flow was disrupted due to delay in compensation by the Centre, its expenditure was around 2 per higher than the last year.

The delay in compensation has cast its shadow over the functioning of normal activities. Today only, the state borrowed Rs 1,000 crore from the Reserve Bank of India through bonds to pay salaries. The state salary and Pension Bill is around Rs 3,000 crore per month.

Manpreet added that he asked other departments to prepare list of activities which was stuck due to shortage of funds. “We can’t afford to lose Rs 18,000 crore as Centre’s share under different schemes in the absence of our share. I have asked to list out the projects which is halted in the absence of state’s share and we are going to pool our share so that we get Centre’s share,” he added.

Besides early release of GST compensation, academician and experts are of the view that the state will have to mobilise additional resources to curtail deficit. They are of the view that all this requires change in the mindset of the government.

The government must focus on additional resource mobilisation. “The government must bring transparency in mining auction as there is a gap between the auction amount and the price the consumer is paying for sand and gravel. Secondly, there is a need to bring reforms in excise collection as there is a lot of leakages. Similarly, there is a need to bring reforms in transport sector as private operators are multiplying fleets, while government is losing revenue. If the government focuses on these sectors, the state’s revenue collection will be doubled compared to the current collection,” said Amarjit Singh Sidhu, senior professor, University Business School, Guru Nanak Dev University.

Manpreet speaks out

}We are facing issues due to delay in compensation. We can’t close jails, schools and hospitals or cut spending on social security. Besides salaries, we have to pay pensions. So, we sought early release of the state’s compensation in a meeting with the Union Finance Minister. — Manpreet Badal, finance minister