Union Finance Minister Nirmala Sitharaman asserted on Thursday (4 January) that the Centre has always been supportive of Tamil Nadu, Kerala, and other states in terms of facilitating the flow of funds. She stated that not only had advance payments been made, but funds were also released to promote infrastructure development in these regions.
Addressing the DMK government's critique that the central government was failing to distribute funds or reconcile its portion, she stated that from 2014 to 2023, the Centre collected Rs 6.23 lakh crore in direct tax (comprising of income and corporate tax) from Tamil Nadu, but returned Rs 6.96 lakh crore to the state within the same timeframe.
"The updated data on the present figures will not be available until March. However, according to the existing stats, Tamil Nadu's direct tax collection from 2014 to 2022-23 stood at Rs 6.23 lakh crore, while we contributed Rs 6.96 lakh crore to the state," she articulated during her speech at the Viksit Bharat Sankalp Yatra programme.
Sitharaman clarified that the misconception that the Rs 6.23 lakh crore is solely paid by the residents of Tamil Nadu is incorrect. She pointed out that this amount also includes contributions from Hindi-speaking taxpayers.
According to Indian Express, she felt compelled to clarify the situation due to a misinformation campaign suggesting that the BJP-led federal government was slow in disbursing funds to the states.
“You are asking to give back your tax money. The Central government has been giving back the cess, tax or even the GST collected from TN and in addition providing additional funds,” Sitharaman said.
Following the COVID-19 pandemic, Prime Minister Narendra Modi requested her Ministry to extend special capital assistance to states for their infrastructure development, going above and beyond the recommendations of the Finance Commission, she observed.
The government under Modi has cleared pending payments of approximately Rs 81,645 crore from 1996-97 to all states, with Tamil Nadu receiving Rs 3,225 crore of this total.
The funds collected through cess and surcharge were redirected back to the state for the development of schools and roads, as well as the Pradhan Mantri Awas Yojana (Rural) and Gram Sadak Yojana. From 2014 to the present, Tamil Nadu has contributed approximately Rs 57,557 crore via cess and surcharge.
A total of Rs 37,965 crore was allocated for the construction of NHAI roads, while Rs 11,116 crore was sourced from the education cess for the comprehensive Samagra Shiksha programme for school education. Additionally, Rs 4,839 crore was given for the PMAY initiative, and Rs 3,637 crore was allocated for the rural roads scheme in the state.
"The accusation that the Centre is withholding funds is incorrect. The Finance Commission is responsible for determining the allocation of funds to each state. The Centre harbors no animosity towards Tamil Nadu, Kerala, or any other state, and does not hold back the funds they are due. These amounts are disbursed monthly, and in some instances, payments are made in advance during festive periods," she explained.
As her speech came to a close, a woman who had attended the event inquired about whether she would receive the flood relief sum. Sitharaman promptly responded, "you will receive it. If you give us the specifics, we will examine your case."
The Finance Minister distributed cheques to recipients of multiple central government programs, including Mudra Yojana, Stand up India, and PM SVANidhi, during the event.
Nishtha Anushree is Senior Sub-editor at Swarajya. She tweets at @nishthaanushree.
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