COVID-19 Cess will be withdrawn once pandemic is over
Under furious attack from various quarters, the State’s finance department has justified the COVID-19 cess imposed on petroleum products with the aim of augmenting the State’s resources in fighting the COVID-19 pandemic. The cess of Rs 5 on high speed diesel and Rs 6 on petrol and motor spirit became effective post midnight of April 28.
Addressing a press conference at the conference hall of civil secretariat here on Friday evening, additional chief secretary and finance commissioner Sentiyanger explained that the cess had been imposed to generate an additional revenue of Rs 55.58 crore annually, adding that the cess had been specifically christened as “COVID-19 cess” to ensure utilisation of the revenue generated for pandemic-related activities only.
He assured that cess was auditable, pointing out though Assam and Meghalaya too had levied cess on petroleum products, they did not mention the reason. But Nagaland was very categorical that this cess was meant for combating COVID -19 pandemic only and would withdraw it once the pandemic was formally declared over, he added.
Imchen clarified that though the price of international crude oil had fallen over the past few weeks, its benefit was not passed on to customers by the Central government. Reacting to social media posts that the Centre had release huge sums of money to Nagaland for combating COVID-19 pandemic, he explained that Rs 346 crore that was being claimed to have been released was actually the amount provided by the Centre as Revenue Deficit Grant, while Rs 20.50 crore was the State Disaster Relief Fund as recommended by the 15th Finance Commission.
He called for viewing the pandemic’s impact not only from the health perspective as it would have a devastating impact on the socio-economic spheres far more than what the world had witnessed so far.
He said the economic challenges were apparent with manufacturing and services sectors having closed down and retrenchment of workers, all of which had a huge impact on tax revenues of governments the world over, adding that India, having gone into lockdown since March 25, was no exception. This, he pointed out had negatively impacted revenues of the Central government as well as that of the States and Union Territories.
In view of the negative impact that State was already experiencing and the likely negative impact in the coming months, Sentiyanger said chief minister Neiphiu Rio had already written to Prime Minister Narendra Modi with projections based on April receipts from the Central government. He informed newsmen that a review of the position towards April-end showed that the level of deterioration in the State’s own revenue receipts was more than what was earlier estimated, and had fallen to Rs 28.47 crore as on date.
Based on this actual position, he said it was clear that the shortfall in the coming months might be higher than what was initially anticipated.
He regretted that the pandemic did not give any choice to the government but to allocate more funds for health infrastructure and other related areas that were not budgeted, leading to increase in the levels of deficit.
Keeping these factors in mind and rather than wait for the crisis to deepen, Sentiyanger asserted that the State government had taken pre-emptive steps in the form of certain austerity measures that included freeze on all fresh appointments, freeze on DA/DR in line with the decision of the Central government and cut on non-development expenditure, including ban on purchase of vehicles, while pro-rata cuts on developmental expenditure were under examination.
He said though Nagaland’s share from Central tax receipts was initially projected at Rs 374.45 crore on the presumption that India’s economy would grow at 10%, recently IMF chief Kristalina Georgieva remarked that India’s economy would grow at 1%.
He said the State’s budget for a month was Rs 374 crore, but in April the government received Rs 263 crore only and there was a shortfall of Rs 111 crore.
Mentioning that though the State’s own revenue was projected at Rs 106 crore and that though in his letter to Modi Rio had projected Rs 98 crore keeping in mind the lockdown because of which the State’s own resource generation would be less, the additional chief secretary said in reality the State’s own revenue was a mere Rs 21 crore when checked on April 30. He claimed thus there was a shortfall of about Rs 77 crore.
Because of this, he pointed out that the chief minister had mentioned the projected shortfall as Rs 955.44 crore, adding the deficit was likely to be higher because the State’s own generation had fallen drastically.
Sentiyanger said Nagaland had to spend unbudgeted amount for health infrastructure and other healthcare related activities to combat the pandemic that was not included in the 2020-2021 budged, adding that the government had spent Rs 30 crore so far from its own resources.
He said the State has received Rs 3.71 crore twice, while North Eastern Council had sanctioned Rs 3 crore for the health & family welfare department. Further, Rs 20.50 crore had been released as first instalment of SDRF for 2020-21 from where maximum up to 35% could be used for COVID-related activities., he said adding Rs 7.42 crore Central grant would be released soon.
Special secretary (finance) V Kezo, who too was present, claimed that the situation was assessed well in advance and as the GSDP was estimated to grow only 1.9%, the government had taken the decision to mitigate the crisis so that Nagaland did not accumulate shortfalls, if there was an outbreak of the pandemic.
OSD finance Talirenba said the government was expecting Rs 30.5 crore from petrol and Rs 35 crore from diesel, totalling Rs 55.58 crore, with the imposition of COVID cess.
The officials said though there was no positive COVID case now, the State could not be complacent and that it was essential to be prepared for worse because of which the decision to levy cess was taken.
DCs to be asked to regulate prices
To queries on price hike in essential commodities, Sentiyanger remarked that the price rise was artificial though lockdown had made things abnormal. Yet, he said he would write to deputy commissioners to regulate prices on essential commodities and other items.
Being the convener of Empowered Committee, Sentiyanger said the members were working on felicitating the returnees from outside the State.