Finance Minister Nirmala Sitharaman convened a virtual conference with Chief Ministers and Finance Ministers from all states and union territories on November 15 to discuss economic issues after COVID-19. She added that the Centre would disburse more devolution money due to states on November 22, allowing them to spend more on capital investment.
Sitharaman made the remarks during a day-long meeting with state chief ministers and administrators to discuss economic and infrastructural challenges. ‘Many states suggested that it would be helpful for them to get a part of the tax devolution front loaded. This being an exceptional year, states will not be short of money when all of us are pushing for infrastructure’, she said.
‘Hence I have asked the Finance Secretary to release an extra instalment this month. On November 22, two devolution instalments of Rs 47,541 crore will be released to states. That totals to Rs 95,082 crore’, she said.
As a result, on November 22, instead of the monthly devolution amount of Rs 47,541 crore, the Centre would release an additional Rs 47,541 crore, totalling Rs 95,082 crore, which will be distributed to the states. Normally, the Centre splits the states’ 41% share of income into 14 instalments over the course of the year, with the first instalment due on November 20.
‘With that, the desire of the states to have some more money in their hands so that they can easily consider spending it for infrastructure creation will be met’, Sitharaman said.
Between April and September of this year, 20 states’ capex increased by 79% over the previous year and by 23% above the pre-COVID levels of 2019-20.
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Chief Ministers from Assam, Chhattisgarh, Goa, Haryana, Himachal Pradesh, Karnataka, Madhya Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Tripura, and Uttar Pradesh, as well as Lt Governors from Jammu and Kashmir and Deputy Chief Ministers from Arunachal Pradesh, Bihar, and Delhi, were present at the meeting.
State Ministers from Andhra Pradesh, Gujarat, Kerala, Odisha, Punjab, Rajasthan, Tamil Nadu, Telangana, Uttarakhand, and West Bengal, as well as state government officials from Ladakh, Maharashtra, Jharkhand, Andaman and Nicobar, Chandigarh, Dadra and Nagar Haveli & Daman and Diu, Lakshadweep, and other officials from the Centre and states, attended the meeting.
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