Union Finance Minister Nirmala Sitharaman.
| Photo Credit: PTI

States have urged the Centre to make some improvements in the 50-year interest free loan scheme for pursuing capital investment projects, under which the Union government has proposed to give them ₹1.3 lakh crore this year, the same amount as 2023-24.

Ministers from States made suggestions related to the ‘Scheme for Special Assistance to States for Capital Investment’, first launched in 2020-21, during pre-Budget consultations chaired by Union Finance Minister Nirmala Sitharaman on June 22.

Ms. Sitharaman also heard out several suggestions from State Ministers regarding the Union Budget 2024-25 likely to be presented next month, along with requests specific to their regions, and assured them that their ideas and inputs will get “due consideration by the Union Government during the preparation of Union Budget 2024-25”.

Apart from Finance Ministers from several States, the meeting was attended by the Chief Ministers of Goa, Meghalaya, Mizoram, Nagaland, and Sikkim, along with the Deputy Chief Ministers of Bihar, Madhya Pradesh, Odisha, Rajasthan and Telangana.

“In her remarks, the Union Finance Minister underlined Union Government’s support to States through timely tax devolution, Finance Commission grants, and arrears of GST Compensation being provided for providing stimulus to growth,” the Finance Ministry said in a statement.

On the ‘Scheme for Special Assistance to States for Capital Investment’, Ms. Sitharaman iterated that while most of the loans under it are untied, a part of the allocation is conditional and linked to citizen-centric reforms by States and sector-specific capital projects. She requested the States to avail these loans by fulfilling those requisite criteria.

Union Finance Minister Nirmala Sitharaman chairs the pre-Budget meeting with Finance Ministers of all States and Union Territories in New Delhi on June 22, 2024.
| Photo Credit: PTI

Union Finance Minister Nirmala Sitharaman chaired a pre-budget meeting with Finance Ministers of all States and Union Territories on June 22 to take suggestions for the upcoming Union Budget 2024-25.

The Union Finance Ministry began consultations on the Budget with different stakeholders a few days ago.

On June 19, Ms. Sitharaman chaired the first pre-Budget consultation meeting, which was attended by Union Minister of State for Finance Pankaj Chaudhary, the finance secretary, secretaries of the departments of economic affairs, revenue, financial services and corporate affairs and the chief economic adviser. She met economists, finance and capital market experts and industry bodies.

Meanwhile, Ms. Sitharaman will also chair the 53rd Goods and Services Tax (GST) Council Meeting, the first meeting after the formation of the new government, later today. State Finance Ministers will attend the meeting. As is the norm, the GST Council gets together to discuss issues pertaining to the GST regime, such as tax rates, modifications to policies, and administrative challenges. The Council is a key player in shaping India’s indirect tax system.

The information on the agenda for the meeting is not yet in the public domain, but, the decisions and recommendations arising from the 53rd GST Council meeting will be closely watched by various stakeholders are keenly watching the meeting as it has the potential to influence taxation, trade, and the economy overall.

The Goods and Services Tax was introduced in the country with effect from July 1, 2017, and states were assured compensation for loss of any revenue arising on account of the implementation of GST as per the provisions of the GST (Compensation to States) Act, 2017 for five years.