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Are the States Getting Their Due Without Hindrance?

revenue collection of the Union government

Before the government announced the Economic Package, one used to regularly hear from the opposition that the state government must be given funds. The Union government while reaching out to the specific segments of the society always ensured that benefits go directly to the beneficiaries’ accounts. It seems that many in the political system wanted large funds at their disposal, so that they could decide how to spend.

Nevertheless, the states are getting their dues as promised by the Centre. It should be noted that when the Corona crisis began, the revenue collection of the Union government also dipped along with the state governments’ revenue. Nevertheless, the union government announced financial assistance to states in its final tranche of the Economic package.

In some of the recent developments, funds have flown to the States assisting them to cope with the troubling time.

The third equated monthly instalment of the Post Devolution Revenue Deficit Grant has been released on June 10, 2020.

On June 4, 2020, the Union government released GST Compensation of ₹36,400 crore to the States/UTs with Legislature for the period from December, 2019 to February, 2020. The GST Compensation of ₹1,15,096 crore for period April-November, 2019 had already been released by the Central Government to the States/ UTs with Legislature.

Acknowledging the fact that the Micro, Small and Medium Enterprises (MSME) suffered majorly during Corona crisis, government announced credit facility apart from giving many other reliefs.  The MSMEs have spread across the nation in all states. People who come up with ‘what are the states getting’ argument often forget that the individuals and different sectors getting relief under the various measures of the Central government belong to different states as well.

Recent update on MSME credit availability makes this case clear.

The present situation has resulted in economic stress on governments at both Centre and state level. States are getting their financial due from time to time and there is no case to argue that somehow states are at disadvantageous position.