June 22nd 2024.
During a pre-budget meeting with state finance ministers, Union Finance Minister Nirmala Sitharaman emphasized the government's commitment to supporting states through various means, such as timely tax devolution and providing arrears of GST compensation. She also encouraged states to take advantage of the 50-year interest-free loans offered by the Centre for implementing specific reforms.
In her statement, Sitharaman highlighted the importance of the Centre's support for states, including tax devolution, grants from the Finance Commission, and GST compensation, as a way to boost economic growth. She also mentioned the ‘Scheme for Special Assistance to States for Capital Investment’ which offers untied loans to states, with a portion tied to citizen-centric reforms and sector-specific projects. She urged states to make use of these loans by meeting the necessary criteria.
Many states expressed their appreciation for the ‘Scheme for Special Assistance to States for Capital Investment’ and offered suggestions for further improvement. The participants also provided valuable recommendations to Sitharaman for the upcoming Union Budget for the fiscal year 2024-2025, as well as some specific requests for their respective states.
Rajasthan's Finance Minister and Deputy Chief Minister Diya Kumari informed reporters that the state has requested an increase in allocation towards the Eastern Rajasthan Canal Project, Jal Jeevan Mission, certain national highway projects, and railway lines. Meanwhile, Karnataka's Finance Minister Krishna Byre Gowda urged for the release of Rs 5,300 crore for the Upper Bhadra Water Project, which has already been announced and declared a national project. He also proposed the inclusion of cesses and surcharges into a divisible pool, ensuring that states receive their fair share of central taxes.
Gowda also suggested an increase in the central government's contribution to housing schemes, from Rs 1.5 lakh to Rs 5 lakh in urban areas and from Rs 1.2 lakh to Rs 3 lakh in rural areas. These requests and suggestions were made by the states during the meeting with Sitharaman and will be considered for the upcoming Union Budget.
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