The all-party legislators meeting on Friday which discussed Arunachal’s current financial situation has raised concern over the gradual fall in its share of central taxes. The predicament is more intensely felt now because the unstoppable Covid pandemic has altered the ways the finances are collected and utilised. A major part of the exchequer has to be reserved for meeting all Covid-related expenses and it’s still unsure how long this will continue. Significantly, this is the case for a large number of states and it’s apparent that as the full effects of the lockdown which has brought the economy to a grinding halt gradually unfold, the scenario may turn out to be further worse.

The main takeaway from the above meeting was that the state’s fiscal year has commenced not very smoothly as the share from central taxes has seen a dip of 17.81 % which is really concerning for a state like Arunachal which depends heavily on this particular revenue source for almost all developmental activities. The pan-India picture is also quite akin to the state’s case and now it is a confrontation with the twin troubles- steep fall in revenues due to complete disruption of economic activities and rising expenses to fight the pandemic. Although the full effects of the lockdown and the resultant complete standstill of the economy are still under process of being documented, it can be rationally presumed that both direct tax and GST collections have squeezed sharply in the first three months of 2020-21 fiscal. Such is the precarious condition that several states have expressed their helplessness and had been compelled to go for extraordinary cost-cutting measures. Delhi government had even gone to the extent of seeking an aid of Rs 5000 crore from the Centre just to pay salaries of its staff. Difficulties of the Northeast states including Arunachal under the current circumstances can well be read, since continued dependency on the Centre for almost all sorts of funding is a historical reality.

Under this context the 40th GST Council meet scheduled on June 12 has assumed greater importance. Delay in release of GST compensation to the states has been a thorny issue lately and it was only last Thursday the Centre, after much delay released Rs 36,400 crore to the states for December 2019 and January & February 2020.

But, it’s gradually becoming clearer that until there is a full commencement of the hitherto halted economic activities, hopefully bringing the much-needed real revival with due importance on energizing the ‘demand’ factor, tax collections will hardly improve.

It’s a sizeable onus that now awaits the Centre and it’s also the time to have a relook of all existing strategies to make them more compatible in mitigating the nation’s cascading financial woes.

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Kenter Joya Riba

(Managing Editor)
      She is a graduate in Science with post graduation in Sociology from University of Pune. She has been in the media industry for nearly a decade. Before turning to print business, she has been associated with radio and television.
Email: kenterjoyaz@easternsentinel.in / editoreasternsentinel@gmail.com
Phone: 0360-2212313

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