Tag: cash balances withnstate

The latest choice to advance an instalment of tax devolution to states, along with the one to be given in November, will assist in money circulation for Andhra Pradesh, Tamil Nadu, Sikkim and Manipur, which had damaging money balances as of October 30.
Rest had a optimistic money stability as of October 30. Frontloading of tax devolution quantity will assist in assembly expenditure wants, particularly on the capital expenditure entrance, although states have considerations about decrease income circulation.
“The frontloading will help meet their expenditure requirements. States though are concerned about their revenue growth which is required on a sustainable basis,” an official stated. Finance Minister Nirmala Sitharaman on Monday had held a gathering with states to debate measures to incentivise expenditure, progress and funding. The Centre had determined that of the 14 instalments of tax devolution, the one to be paid in March might be superior and states will given an instalment, along with the one to be given in November. “Contrary to popular impressions, most of the states are not in negative cash flow. In fact, cash balances are very high at the moment, with very few exceptions. As of October 30, Rs 2.66 lakh crore of positive cash balance was there among states…,” Finance Secretary TV Somanathan had stated on Monday.
“It’s not as if most of the states are in cash trouble but this will enable them to frontload their capital expenditure,” he stated. At current, 41 per cent of tax collected is devolved in 14 instalments which provides predictability of money flows to states. On November 22, as an alternative of the conventional month-to-month installment of tax devolution quantity of Rs 47,541 crore, I’ve requested to launch one other Rs 47,541 crore — a complete of Rs 95,082 crore might be given to states on November 22.