Kerala Calls for 5 Year Extension of GST Compensation, Higher Allowance in Centrally Sponsored Programs | Kerala News
New Delhi: Kerala on Thursday demanded a five-year extension of the GST compensation period and a rehabilitation program for “return migrants” who have returned to the state from foreign countries amid the pandemic of COVID-19.
In a list of requests submitted to the Center at Union Finance Minister Nirmala Sitharaman’s pre-budget meeting with state finance ministers, Kerala also called for making the National Health Mission a fully-fledged program. funded by the center as well as an increased allocation for such programs.
Informing the media, Kerala Finance Minister KN Balagopal said the state had demanded increased allowances under centrally sponsored schemes (CSS) and compensation for lost income from central transfers in due to the reduction in the share of the division pool, among other demands.
âGiven the situation of poor collection of GST revenue due to COVID-19, it is highly necessary to have a political decision to extend the GST compensation period by an additional five years. More often than not, there is a delay in releasing compensation from the GST, which forces states to take out short-term interest-bearing loans, âthe memorandum said.
While mentioning the goods and services tax (GST) compensation, Balagopal said many other states have raised the issue as well. The current period will end in June 2022.
The state has also advocated for the rationalization of taxes and surcharges.
According to Balagopal, there are a lot of migrants, mostly from the Middle East, who have returned to the state following the pandemic and a special package should be there to help them find jobs.
Kerala has a significant number of people working overseas and remittances are a major contributor to the state economy.
“There is a substantial increase in return migration to Kerala, especially since the spread of COVID-19 … we are awaiting liberal aid from the Union government through the next budget … for a program of rehabilitation specifically for returning migrants to Kerala, âthe memorandum said.
About 10 to 15 lakh of people have returned and have not yet left, this is the preliminary estimate. There are also limitations for these people to immediately return and find employment, as there is now an increase in COVID cases, the minister stressed.
Among other demands, the state demanded an increase in CSS allocations.
In the National Health Mission, the Centre’s contribution is 60 percent and the rest of the amount is paid by the respective states.
Amid a potential resurgence of COVID cases, Balagopal said the National Health Mission should become a â100% CSSâ.
Kerala also called for an increase in the allocation under the CSS to compensate for the “steadily declining inter-se share of state devolution”. In addition, he advocated for authorizing specific grants to the state, as recommended by the Finance Committee.
While emphasizing the need to increase public spending, Balagopal said there should be an initial burden of capital spending, especially given unemployment and the current economic situation.
Another request made is for the urgent payment of the central share (50 percent) of UGC Pay revisions arrears amounting to Rs 1,061 crore to the government.
In addition, Kerala requested a âspecial assistance programâ to adequately support countercyclical measures taken by state governments in their efforts to stimulate economic recovery.
Regarding the GST, the minister said that there are certain shortcomings in its implementation and also the issue of counterfeit bills.