No fund discrimination among states: Nirmala SitharamanTop Stories

February 06, 2024 19:53
No fund discrimination among states: Nirmala Sitharaman

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In her response to Congress member Adhir Ranjan Chowdhury's question in the Lok Sabha, Union Finance Minister Nirmala Sitharaman strongly denied allegations that the Centre was withholding funds from non-BJP ruled states. Sitharaman clarified that the distribution of taxes was carried out as per the recommendations of the Finance Commission and she had no discretionary powers in this regard.

She dismissed the notion that certain states were being discriminated against, stating that such beliefs were politically motivated and perpetuated by vested interests. Sitharaman pointed out that 100% of the state Goods and Services Tax (GST) is automatically transferred to the states, while approximately 50% of the integrated GST is shared with the states and periodically readjusted to match the actual figures. She emphasized that the division of the Central GST (CGST) is determined based on the guidance of the Finance Commission.

Sitharaman further emphasized that she did not have the authority to make changes according to her own preferences and that she plays no role in determining the percentages of tax distribution. She encouraged states to convey their needs and requirements to the Finance Commission during its visits so that they can be considered and addressed. In conclusion, Sitharaman expressed her desire for introspection, suggesting that when the Finance Commission visits, states should communicate their needs and allow the commission to address them. She highlighted that until six months ago, the distribution of funds seemed satisfactory, and urged Chowdhury to reflect on the situation.

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