CHANDIGARH: The cash-strapped Punjab government is yet to receive its share of Goods and Services Tax (GST) amounting to nearly Rs 1,900 crore from the Union government, which was due on June 30. 

It is learnt that the Punjab government was forced to carry out market borrowing of around Rs 5,500 crore in the last two months. Central government’s delay in the release of state’s GST component upsets state government’s cash flow. As the state governments now receive their GST share after a gap of two months, it becomes difficult for the states like Punjab, reeling under debt, to carry out its normal activities. At the same time, the state government is witnessing low collection of its non-tax revenue. Punjab has been able to collect just 3.59% (Rs 340 crore) of the total estimated yearly non-tax revenue (Rs 9,477 crore) in the first two months of this fiscal. 

Sources in the finance department said delay in the release of state’s GST component has been because the Union government’s interim budget presented on February 1was effective till June 30. After the NDA government came to power for the second consecutive term, Union finance minister Nirmala Sitharaman presented the budget for the financial year 2019-20 on July 5. 

It is also learnt that the Union finance ministry has withdrawn its earlier directions issued on April 10 to the Reserve Bank of India (RBI) and all the states to spread the market borrowing calendar evenly in all quarters of the year. According to these instructions, the Union finance ministry had fixed 25% quarterly market borrowing limit of Punjab amounting to Rs 4,358 crore on the basis of its yearly net borrowing limit of Rs 17,434 crore. But Punjab finance minister Manpreet Singh Badal had written to the Union finance minister to reconsider the decision in the larger public interest. 

The Punjab government had apprised the Union finance ministry that every state has its own requirements based on its financial conditions and such compulsions imposed by the Union finance ministry were unjustified. 

Published On : 24-07-2019

Source : Times of India