Odisha CM meets Union Finance minister, raises a host of issues

Odisha Sun Times Bureau
New Delhi, June 2:

Odisha Chief Minister Naveen Patnaik today met with Union Finance minister Arun Jaitley and urged him to either fully compensate the state for the Central Sales Tax (CST) loss or restore the CST rate to original 4% till implementation of Goods & Services Tax (GST), sources said.

While asking the Finance minister for the timely release of Central assistance Patnaik demanded the opening of commercial banks in 4620 unbanked gram panchayats of Odisha, sources said.

Patnaik also drew the attention of the Union Finance Minister on short release of Plan Grants to the State. He said that under the 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 MGNREGA scheme, the state received only Rs.757 crore against the approved Central share of Rs.1363 crore during 2013-14 fiscal, Patnaik said.

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.

The chief minister brought to the notice of the Union Finance minister the fact that till date Odisha has as many as 4620 Gram Panchayats and 48,000 villages which do not have banks.

He said only about 100 brick and mortar branches of banks have been set up in Odisha since April, 2012 as against the target of 2400 branches as per the RBI guidelines.

Patnaik impressed upon the Union 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.

Patnaik apprised the Union Finance minister about inadequate crop loan disbursement by commercial banks in Odisha which has remained pitiably low – between 30% to 35% – during the last three years, in sharp contrast to their national level share of over 80%.

Chief minister also said that Odisha has one of the highest levels of poverty and the natural calamities severely affect the farmers every year, destroying their crops, houses and cattle and urged upon the Union Finance minister for augmentation of commercial bank credit to the farm sector in Odisha.

Patnaik raised the issue of non-revision of royalty rate on major minerals since August 13, 2009 and said 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 3 poor mineral-bearing states including Odisha get adequately compensated for the negative externalities caused by mining activities.

Finance minister Jaitley appreciated the genuine concerns of the state while recognizing that short release of funds by the Central government during recent years has indeed impacted many states adversely and assured the Chief Minister that he will issue necessary instructions to improving the level of financial inclusion of the state including opening up of new brick & mortar bank branches in the gram panchayats and villages not covered yet 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 receive the attention of the Centre on a priority basis.

Earlier in the day, Patnaik met Prime Minister Narendra Modi at his office along with 24 MPs of his party to press for the various demands of the state which included longstanding demand of special category status for the state, stalling Polavaram project and raising of royalty on minerals.

Patnaik has described his meeting with the Prime Minister as “positive”.