Odisha CM Naveen Patnaik meets FM Arun Jaitely, asks for commercial banks in 600 panchayats in state

cmfmjaitelyNew Delhi: Odisha Chief Minister Naveen Patnaik meets Finance Minister Arun Jaitely in New Delhi today. CM Patnaik asks for commercial banks in 600 panchayats.
Chief Minister, Odisha informed the Hon’ble Union Finance Minister that the State’s fiscal has been strained during recent years on account of either non-release or inadequate/ untimely release of Central Assistance. He stated that the Union Government has not been fulfilling its commitment since 2010-11 on compensating the State for phasing out Central Sales Tax. During 2010-11, the State received an amount of Rs.256 crore only towards compensation as against the loss assessment of Rs.664 crore and no compensation has been received during last three years from 2011-12 to 2013-14, he stated.
Chief Minister impressed upon the Union Finance Minister to either fully compensate the State for the CST loss or restore the CST rate to original 4% till implementation of Goods & Services Tax.

Chief Minister also drew the attention of the Union Finance Minister on short release of Plan Grants to the State. He added that under Accelerated Irrigation Benefit Programme (AIBP), the State received only Rs.38 crore against actual expenditure of Rs.1084 crore during 2012-13 and has not received any amount during 2013-14 against the actual expenditure of Rs.885 crore. Similarly, under Central Sector Scheme MGNREGA, the State received only Rs.757 crore against the approved Central Share of Rs.1363 crore during 2013-14. He observed that short releases by the Central Government have adversely impacted the fiscal health of the State and the implementation of State Plan Schemes/ Central Sector Schemes and urged upon him to ensure timely and adequate release of Central Assistance for Plan Schemes.
Chief Minister brought to the notice of the Union Finance Minister that even till date Odisha has 4620 Gram Panchayats and 48,000 unbanked villages. He stated that only about 100 brick & mortar Bank branches have been set up in Odisha since April, 2012 as against the target of 2400 branches according to RBI guidelines. He impressed upon the Union Finance Minister to issue suitable instructions to RBI and Scheduled Commercial Banks to cover all the 4620 Gram Panchayats with brick & mortar Bank branches during the 12th Plan period itself. He also informed the Union Finance Minister about inadequate crop loan disbursement by Commercial Banks in Odisha which, he stated, has remained unacceptably low between 30% to 35% during the last 3 years, in sharp contrast to their national level share of over 80%. Chief Minister stated that Odisha has one of the highest levels of poverty and the natural calamities severely impact the farmers every year destroying their crops, houses and cattle and urged upon the Union Finance Minister for augmenting Commercial Banks credit to the farm sector in Odisha.

Chief Minister raised the issue of non-revision of royalty rate on major minerals which was last revised on 13.8.2009. He stated that Odisha is losing over Rs.5 crore everyday on account of delays in revising the royalty rate upwards from 10% to 15% as recommended by the Study Group set up by the Central Government. He impressed upon the Union Finance Minister to revise the royalty rate to 15% without further delay so that poor States like Odisha get adequately compensated for the negative externalities caused by mining activities.
Union Finance Minister appreciated the genuine concerns of the State while recognising that short release of funds by the Central government during recent years has indeed impacted many States adversely. He assured the Chief Minister that he will issue necessary instructions for improving the financial inclusion of the State including opening up of new brick & mortar Bank branches in uncovered Gram Panchayats and villages and disbursement of credit by Commercial Banks to farmers. He assured that all other issues including revision of royalty rate on minerals and compensation to the State for the revenue loss incurred on account of reduction in CST rates will be given priority attention by the Union Government.

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OdishaInc Bureau