Odisha faces Economic Challenges, reduction in Central shares, less GST Compensation.

Even as Odisha has recorded an overall GST collection of Rs 3,195.75 crore in May posting a growth of nearly 50 per cent (pc) compared to same month last year, the economy does not seem to be as robust as is being claimed by the State government.

Despite the growth in GST collections of the State during the pandemic, the State economy faces two challenges – drastic reduction in transfer of Central shares and less GST compensation.

Though the issue was raised by BJD Rajya Sabha Member and national spokesperson Amar Patnaik earlier in the day, none from the Finance department including Minister Niranjan Pujari was available for comment in this regard.

Patnaik said Odisha’s share in the divisible pool is 23 per cent less obviously because of the lockdowns and shutdowns imposed due to the second wave of the Covid pandemic. 

Besides, the BJD MP claimed that the Centre’s GST collection has been Rs 40,000 crore less compared to last year and the compensation amount will also go down accordingly.

Even in 2019, GST compensation provided by Centre for 2020 has been 11 per cent less.

Sources maintained that the transfer of Central share to the State during the first four months has been Rs 5,500 crore, around Rs 2,000 crore less than anticipated.

In 2021-22, receipts from the State’s share in Central taxes (devolution) are estimated to be Rs 30,137 crore, an annual decrease of 1 per cent over 2019-20.

Besides, the State’s own tax and non-tax revenue, total own tax revenue of the State, is estimated to be Rs 37,500 crore during the fiscal.

However, the State’s share in the Central taxes is likely to come down to around Rs 20,000 crore during the year, less by Rs 11,000 crore because of the Covid restrictions imposed both by the State government and the Centre. 

As the blame game continues between the BJD and BJP over the State’s performance in achieving the NITI Aayog’s SDGs, the ruling party in Odisha has opened another front to target the Centre though not directly.

There has been more revenue collections by the State as the non-tax revenue has increased by 181 pc, Patnaik added.