Odisha urges Centre to fully compensate CST loss

Odisha has sought full compensation from the Centre against CST (central sales tax) loss, citing that it has not received any compensation from 2011-12 to 2013-14.

During his meeting with Union finance minister Arun Jaitley, chief minister  Naveen Patnaik prevailed upon him to either fully compensate the state against CST loss or restore the CST rate to the original four per cent till implementation of Goods & Service Tax (GST).

The Union government has not fulfilled its commitment since 2010-11 on compensating the state for phasing out CST, Patnaik rued. In 2010-11, Odisha had received only Rs 256 crore against the loss assessment of Rs 664 crore.

Patnaik also stated that non-release or inadequate release of central assistance had strained the state’s finances.

“Under Accelerated Irrigation Benefit Programme (AIBP), the state received only Rs 38 crore against actual expenditure of Rs 1,084 crore during 2012-13 and has not received any amount in 2013-14 against the actual expenditure of Rs 885 crore. Similarly, under central sector scheme Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), the state received only Rs 757 crore against the approved central share of Rs 1,363 crore during 2013-14,” he said.

Stating that short releases by the Central government have adversely impacted the fiscal health of the state and the implementation of state plan schemes/ central sector schemes, Patnaik urged upon Jaitley to ensure timely and adequate release of central assistance for plan schemes.

Patnaik also apprised the Union finance minister on 4,620 gram panchayats and 48,000 villages yet to be covered by banking services.

“Only about 100 brick & mortar bank branches have been set up in Odisha since April 2012 as against the target of 2,400 branches according to RBI guidelines. Suitable instructions should be issued to RBI and scheduled commercial banks to cover all the 4,620 gram panchayats with brick & mortar bank branches during the 12th Plan period itself,” he said.

Patnaik complained about inadequate crop loan disbursement by commercial banks in Odisha which, he stated, has remained unacceptably low between 30-35 per cent during the last three years, in sharp contrast to their national average of over 80 per cent.