NEW DELHI, May 9 � With Assam facing financial crunch, Chief Minister Tarun Gogoi today called for early release of the 13th Finance Commission grants, besides immediate release of the Central Sales Tax (CST) due to the State.
In a detailed memorandum to Union Finance Minister Arun Jaitley, the Chief Minister narrated the State�s financial woes and the likely impact of the resource crunch plaguing the State.
Gogoi stated that he had already written to the Prime Minister to release the total balance amount of Rs 772.44 crore admissible to the State under the 13th Finance Commission for the year 2014-15. An amount of Rs 470.96 crore is yet to be released by the Government of India, he reminded Jaitley and sought its immediate release.
On the CST, Gogoi, who returned to Assam today, said that in the post-VAT scenario, the reduction in the Central Sales Tax rate from four per cent to two per cent has caused substantial loss of revenue for the State.
Accordingly, the Government of Assam submitted its claim for CST compensation from time to time. �Unfortunately, against our CST compensation claim for Rs 1,667.54 crore up to 2012-13, till now the State has got only Rs 573.33 crore, including Rs 87.764 crore released during the year 2014-15.�
The Chief Minister urged the Finance Minister to arrange for release of the balance amount of Rs 1,579.78 crore of the CST compensation for the years 2010-11 and 2012-13 at the earliest.
Reiterating the demand for a hike in crude and gas royalty, Gogoi mentioned that the Ministry of Petroleum and Natural Gas has been allowing ONGC and OIL to sell crude oil to the oil marketing companies at heavily subsidised price, and consequently, also to pay royalty to the oil producing states on the basis of such highly subsidised sale price of crude oil. Such subsidy, which is deducted in the name of discount, has at times been as high as 100 per cent, or even more. This has resulted in cumulative loss of revenue of more than Rs 10,000 crore for Assam since 2008-09.
A Special Category State like Assam cannot afford such a huge loss of revenue on a commodity which is the only major natural resource base of the State, he pointed out.
The Chief Minister, referring to Gujarat�s case pending in the Supreme Court, complained that though the ONGC has been paying royalty to
Gujarat on pre-discounted price, they have not been paying royalty on pre-discounted price to Assam.
�I am of the firm opinion that the said Supreme Court interim order should apply with equal force to central PSUs like ONGC and OIL operating in Assam, which is entitled to get royalty on the actual market-driven price.
�While giving the benefit to the most advanced state of the country, namely Gujarat, a special category State like Assam cannot be meted out a step-motherly treatment. I feel that subject to pending outcome, oil-producing companies can make the payment of royalty at pre-discounted price of crude oil, at least with effect from February 1, 2014, in pursuance of the interim order of the apex court,� Gogoi demanded.
Supporting the introduction of GST, which is considered to be the most significant indirect tax reform since Independence, Gogoi suggested that petroleum products be kept outside GST constitutionally, as the revenue loss would be substantial as one-third of the State revenue comes from petrol and petroleum products.
Further, there should be direct provision in the Constitution Bill to provide 100 percent compensation for the NES for a period of at least 10 years, without linking such compensation to the GST Council. Further, the envisaged benefit of Service Tax would not be substantial for Assam as manufacturing and service sectors are underdeveloped.
The cost of the IT infrastructure, training and publicity, required for successful rollout of GST, should be entirely borne by the Government of India for NES, he demanded.
About the State�s financial position, he lamented that while the need for additional Central assistance has become even more pressing, the funds released to the State are showing a declining trend.
�We had made budget provision of Rs 21,000 crore for plan expenditure during 2014-15 based on the general trend of annual plan allocations made by the Planning Commission in the previous years.
�However, we received an allocation of Rs 18,000 crore only by the Government of India. The actual amount released to Assam in 2014-15 was only Rs 13,632.63 crore, resulting in the availability of less resources for development,� he said.
�The declined flow of funds during the year 2014-15 clearly shows that the development of the State has been adversely impacted,� Gogoi pointed out.
About the changing funding pattern and zero-Central support for 12 schemes vis-�-vis proportionately less devolution of funds during 2015-16, Gogoi said that earlier the erstwhile Planning Commission used to indicate the quantum of Central support and resources, which would be available to States for the ensuing year. �We should be made aware in time about the actual allocation for the year so that proper planning can be done,� the Chief Minister said.
�For the current year, we have not received any communication from NITI Aayog in this regard. Under such circumstances, we had to make allocations based on historic assumptions about growth in Central assistance, while preparing the State Budget for 2015-16.
�Accordingly, the Assam Legislative Assembly had already passed the State Budget for the current year with proposed plan expenditure of Rs 26,338.70 crore,� he informed.