Sitharaman Says Centre Will Provide Support To States Via Timely Tax Devolution, GST Compensations, Grants

The Union Minister urged the states to capitalise on the scheme wherein the Centre offers 50-year interest free loans to the states for implementation of reforms

The meeting participants also provided suggestions to Sitharaman for inclusions in the Union Budget for the 2024-25 fiscal year (FY25) and shared some specific requests from the states.

Source : PTI

Finance Minister Nirmala Sitharaman on Saturday said that the Centre would provide support to states via timely execution of tax devolution and GST compensation arrears to help promote growth. Holding the pre-Budget meeting with state finance ministers, the Union Minister urged the states to capitalise on the scheme wherein the Centre offers 50-year interest free loans to the states for implementation of reforms.

The minister in her remarks underlined that the government would back the states via tax devolution, Finance Commission grants, and GST compensation. Sharing an official statement regarding the ‘Scheme for Special Assistance to States for Capital Investment’, Sitharaman stated that majority of the loans are untied, while a portion of the loans remains conditionally-linked to reforms focused on the public by states and sector-specific capital projects. The minister urged the states to access these loans by meeting the required criteria.

The states expressed appreciation for the scheme and also shared suggestions for more improvement. The meeting participants also provided suggestions to Sitharaman for inclusions in the Union Budget for the 2024-25 fiscal year (FY25) and shared some specific requests from the states.

Speaking to reporters, Diya Kumari, Rajasthan Finance Minister and Deputy CM, said that the state requested an increase in allocation towards Eastern Rajasthan Canal Project (ERCP), some national highway projects, Jal Jeevan Mission (JJM), and certain railway lines.

Karnataka requested an assistance of Rs 5,300 crore from the already announced help for the Upper Bhadra Water Project. State finance minister Krishna Byre Gowda requested it to be declared a national project. 

Gowda also sought the inclusion of cesses and surcharged into a divisible pool that allows the states to get their rightful part in the central taxes.