By Bizodisha Bureau, Bhubaneswar, December 17, 2019: Cash starved Odisha has something to cheer about with the centre announcing release of Goods and Services Tax (GST) compensation of Rs 35,298 crore.

The state is facing financial hurdles to implement a large number of welfare schemes announced by the Government notwithstanding impressive 9 per cent growth in revenue generation during the first eight months of this fiscal.

The GST compensation was pending since August, 2019 and Odisha’s due has been pegged at Rs 1194 crore. The Odisha Government had written to the Centre for early release of dues as further delay would affect implementation of development projects. In fact, non-BJP ruled states have been protesting the delay in releasing the compensation.

The State has so far received Rs 1,545 crore in two installments, the first Rs 623 crore was released on July 30 and the second installment of Rs 922 crore was paid on September 2, 2019. As against an estimation of Rs 9,330.94 crore, the GST collection of the State till September-end was Rs 6,591 crore. The shortfall of Rs 1,194 crore will have to be compensated by the Centre.

Nevertheless, whether the entire due was paid or only a part of the compensation amount was released by the centre to the states is not yet clear.

When GST was rolled out on July 1, 2017, states were promised through legislation to be compensated for the loss of revenue. The compensation amount was fixed at 14 per cent on top of revenue in the base year of 2016-17.

Incidentally, the release of compensation has come days before the 38th meeting GST Council meeting scheduled on December 18 when some Opposition-ruled states such as Punjab, West Bengal and Kerala were planning to the raise the issue. The issue was also raised by the MPs from the Opposition ruled states during the winter session of the Parliament.