Income from VAT remained the main source of revenue:
Taxes, especially VAT, has been the main source of revenue for Uttarakhand over the years. The annual growth in income from VAT has been around 18 per cent. After the implementation of GST from July 1, 2017, Uttarakhand has suffered a setback in terms of tax revenue.
Although the central government gave a big boost to the state’s source of income by giving GST reimbursement for the next five years i.e. till June 30, 2022. This reimbursement has stopped after June 30. Since then, the state government is making full efforts to increase the income from SGST.
As a result, there has been an increase of 36 per cent in SGST till December, 2022 as compared to December, 2021. The total increase in income after meeting GST and VAT is 29 percent. Despite this, the fact is that due to non-reimbursement of GST, the state government has suffered a setback in the form of a shortfall of about 5000 crores per year.
All the states including Uttarakhand have been continuously raising this issue in the meetings of the GST Council. Although the central government has not taken a positive stand towards the continuation of GST reimbursement, it has also indicated relief to the states.
Special assistance scheme can be started for capital investment
A special assistance scheme for capital investment can be started for the states which suffer losses due to non-reimbursement of GST. Under this, the central government can provide interest-free loans to the states for a long period.
The state government is hoping that this scheme can be presented in the budget of the central government on Wednesday. By getting interest free loan, Uttarakhand will be able to get funds from the central government for infrastructure development works.
Apart from this, the scope of centrally sponsored schemes and flagship schemes of the Center can be increased in the new budget. If this happens, great help will be available to the state through these schemes.
As a special status for 11 Himalayan states including Uttarakhand, there is a provision to get more grants in the schemes of the central government. Finance Secretary Dilip Jawalkar said that if there is an increase in the allocation of funds for centrally sponsored schemes in the budget of the central government, then the state will definitely get its benefit.
