With the State Government having a shortfall in tax revenue due to the Covid-19 pandemic, The Union Government has provided Rs 388 crore as Special Assistance for Capital Expenditure.
The Department of Expenditure in Ministry of Finance has intimated the State Government in this regard. The Union Government has provided Rs 7,500 crore to 18 States, including Odisha’s share of Rs 388 crore out of the Special Assistance Kitty to take up Capital Expenditure.
This amount has been allocated amongst the States in proportion to their shares of Central Taxes as per the Interim Award of the Fifteenth Finance Commission (FFC) for the year 2020-21.
As the FFC has fixed inter se share of Odisha at 4.6% level, the State has been provided its due.The Special Assistance is provided to the State in the form of a 50-year interest-free loan to be utilised for new and ongoing capital projects for the State’s long-term benefit.
This entire amount would be spent by March 31, 2021, said an order issued by the Department of Expenditure.
While the State Government has many commitments like salary, pension, interest payments, which are fixed commitments, paucity of funds for Capital Expenditure is likely to stall the capital projects.
While priority would be given to the new projects on which money can be spent by March 31, 2021, the funds may also be used for settling pending bills in ongoing projects.In fact, the Odisha Government is spending more on Capital Expenditure and funding major futuristic projects for long-term benefit of the State.
However, in this Special Assistance package, the Centre has issued several tough guidelines, which are not very palatable for the States in a Federal form of governance.
Now, the State Governments have to submit an application giving requisite details of the projects, which the States intend to spend for using the special allocation.
The Centre would release funds directly to the implementing agencies. However, details would be provided by the States, said sources.
The implementing agencies may be the Government departments or State PSUs or any other agencies, which are under the administrative control of the State Governments.