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States to get additional Rs 47,500 crore this month: Finance minister


NEW DELHI: The Centre on Monday decided to release an additional Rs 47,500 crore to states as their share of taxes in order to boost capital spending, especially for infrastructure. The Centre said the reduction in excise duty on petrol and diesel would not impact transfers to states. While states were to be given Rs 47,541 crore by next Monday, finance minister Nirmala Sitharaman, following her consultation with states and Union territories, asked officials to release a matching amount. Typically, funds are transferred in 14 instalments to states with three paid in March. This time one tranche is being released in November instead of March, Sitharaman told reporters at a late evening press conference. 11 states achieve capex targets for Q1 of FY22The Centre, which has seen healthy revenue collections, has already stepped up fund transfer for GST compensation and is now pushing more funds to states, which were sitting on cash balance of nearly Rs 2.7 lakh crore at the end of October. Only four states had a negative cash balance, finance secretary TV Somanathan said, adding the cut in levies on petrol and diesel is not going to impact resource flow to states as it has been done out of the non-sharable part. “It is entirely a revenue loss to the Centre,” he said. For the Centre, higher capex has been a key theme. The government hopes it will lead to higher demand for steel, cement and other inputs, and create jobs. Sitharaman said 11 states, including Andhra Pradesh, Bihar, Chhattisgarh, Madhya Pradesh and Kerala, had achieved their capex targets for the first quarter. The FM said the interaction was to get a perspective from states in terms of steps that may be required and their expectations. During the meeting, the FM said states should leverage the favourable investor perception. “Sitharaman urged states to help India become the fastest growing economy in coming years through facilitating investment attractiveness and expediting ease-of-doing business measures and undertake power reforms with regards to reduction in AT&C (Aggregate Technical & Commercial losses) and ACS-RRR. Smt. Sitharaman further emphasized that since in many cases land is one of the major bottlenecks for project on-grounding, states must contrive to smoothen land acquisition procedures and create land banks to be tapped at the time of investment,” an official statement said. On their part, states came up with several suggestions, such as an affidavitbase clearance system, which is already in place in Karnataka and UP, for faster approvals.


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