BENGALURU: After a delay of about one-and-half months, the Union government released the GST compensation dues for August-November to Karnataka earlier last week, albeit partially. But the move has barely built any confidence in the State’s Finance Ministry which is already stretching itself to meet deadlines, implement projects and take up flood rehabilitation and relief. In fact, the Centre’s delay in paying the dues has led to uncertainty about the next two scheduled instalments — one by the December-end and another by March-end next year.
Karnataka was to receive Rs 7,040 crore as GST compensation for August-September and October-November, but the Centre has released only Rs 3,600 crore so far. The first instalment of payment only covers dues for August-September, while another tranche of about Rs 3200 crore for October-November is pending. Another instalment for February-March is only expected in 2020 before the next fiscal year begins.
It isn’t just the irregular and delayed GST compensation payment that has left the State’s finances in tatters. For at least three years now, the Union Government has been delaying payment of Rs 803 crore that is overdue to Karnataka under the MGNREGA scheme. The pending dues so far this year alone stands at Rs 757 crore.
“Two more instalments of GST compensation are due, but we don’t know when and whether we will get it,” said an official of the Finance department. In fact, the Finance Ministry, during the GST Council held in New Delhi earlier last week, headed by Union Finance Minister Nirmala Sitharaman, did not respond to states’ queries on carryover of pending compensation.
“Some states raised the issue, but there has been no decision yet. We don’t know whether it will get carried over to the next fiscal,” said a senior bureaucrat in the Finance Department. Given that funds from many departments have been rerouted to the Revenue Department’s disaster management department which is overlooking flood relief, many projects announced in the previous budgets have remained untouched.
The delay in paying dues is making matters worse. For two months now, the Rural Development and Panchayat Raj department has not been able to pay wages under the MGNREGA scheme due to delay in payments. “The Centre has to immediately give us Rs 1,559.99 crore towards MNREGA. Of this, Rs 803 crore has to be paid as reimbursement since the state government shelled out advance payments towards the Centre’s share over the last two-three years. Another Rs 757 crore has to be released for wages and material,” said an official. Department officials also add that every time a request for payment is raised, the Centre resorts to tactics of buying time.
Under MGNREGA, state achieves 8.5 crore person-days
The state was projected to get Rs 17,249 crore as GST compensation this fiscal year, but officials are not sure about it. Under MGNREGA, the state had set a target of 12 crore person days and has achieved about 8.5 crore person days so far. But the severe floods that hit the state posed the first challenge while the delay in payments by the Centre is posing a bigger challenge.