The State is putting up with a ₹700 crore to ₹800 crore monthly shortfall in tax mop up every month following the implementation of the Goods and Services Tax (GST), Finance Minister T.M. Thomas Isaac has said.
Replying to questions at a news conference here on Thursday, Dr. Isaac said the tax collection was only around ₹1,200-₹1,300 crore a month against the earlier ₹2,000 crore. The shortfall was substantial even after factoring in the compensation from the Centre, but this did not mean that the State was in a fiscal crisis. The crisis of the kind that the State had experienced during the October-December period was behind it now, he added.
The Finance Minister said the situation had been turning increasingly grim over the past four to five years with the government not finding enough money to implement budget proposals. This had forced the officers to make book adjustments making it appear that the amounts allocated in the budget, totalling ₹13,000 crore, had been transferred to the public account. The Centre had, however, taken exception to this practice and insisted on treating this as excess borrowing, thereby putting a cap on the State’s borrowing limit. The State had to finally agree to ‘forego’ ₹6,000 crore to get the Centre to raise its borrowing limit and tide over the crisis during the third quarter, he pointed out.
In what could turn out to be a major relief for local government institutions, Dr. Isaac said the government would reverse its earlier decision not to allow local government institutions to have spillover projects in view of the funds crunch. The local bodies would now be permitted to carry over implementation of all projects budgeted for 2017-18 to the coming financial year.
Funds would be sanctioned for such projects based on the e-lapse system wherein spillover work would be kept in a queue and provided funds. This should help the local government institutions deliver on their 2017-18 annual Plan promises, the Finance Minister said.
