Release of the sum by the Centre is expected to address State’s revenue deficit
The Tamil Nadu government, which is facing a huge challenge of funding restoration and rehabilitation measures in districts hit by Cyclone Gaja in the midst of a growing problem of revenue deficit, is banking on the Centre to provide ₹8,684 crore, due to the State, under the Goods and Services Tax (GST) scheme for mitigating its “cash flow constraints.”
In the assessment of the State government, the figure is a sum of two components of the scheme — the Integrated Goods and Services Tax (IGST) settlement and the GST compensation.
If the amount is made available to the State government, the problem of revenue deficit can be contained to a large extent, said a senior official handling issues concerning commercial taxes. For the current year, the revenue deficit is estimated to be around ₹17, 500 crore.
A few days ago, Chief Minister Edappadi K. Palaniswami wrote to Prime Minister Narendra Modi, seeking his intervention in the matter and requesting him to provide “suitable instructions” to the Union Finance Ministry for the early release of funds to the State.