Union Ministry of Finance Current Affairs - 2020

Rs 6,195.08 crore released to 14 States as Post Devolution Revenue Deficit Grant in July 2020

The Department of Expenditure (under Union Finance Ministry) has released a notice on 8th July 2020 as per which Rs 6,195.08 crore has been released to 14 states in the country. The amount released is as per the recommendation of the 15th Finance Commission.

Under the Post-Devolution Revenue Deficit grant for Financial Year 2020-21, this is the fourth equated monthly installment. The first installment was released on 13th March 2020, followed by Second in May and the Third installment in June 2020.

The amount is recommended by the 15th Finance Commission on a monthly proportionate basis as grants-in-aid to cover deficit on the Post-Devolution Revenue account in Financial Year 2020-21.

Background

The Post-Devolution Revenue Deficit for the entire Financial Year 2020-21 was estimated Rs 74,340 crore by the 15th Finance Commission.  A total of 14 states in the country are eligible for the grants.

However, in the Union Finance Budget for FY 2020-21, the Post-Devolution revenue deficit grant for the entire FY 2020-21 allocated by the Finance Ministry was Rs 30,000 crore. That means the 14 eligible states will be transferred a total of Rs 30,000 crore instead of the recommended Rs 74,340 crore by the 15th Finance Commission.

14 States & Amount that will be Transferred in Monthly basis in this FY 2020-21

The amount of Rs 6,195.08 crore was transferred to the 14 states as per given below in all the four equated monthly installments to date.

  • Andhra Pradesh: Rs 491 crore
  • Assam: Rs 631 crore
  • Himachal Pradesh: Rs 952 crore
  • Kerala: Rs 1276 crore
  • Manipur: Rs 235 crore
  • Meghalaya: Rs 40 crore
  • Mizoram: Rs 118 crore
  • Nagaland: Rs 326 crore
  • Punjab: Rs 638 crore
  • Tamil Nadu: Rs 335 crore
  • Tripura: Rs 269 crore
  • Uttarakhand: Rs 423 crore
  • Sikkim: Rs 37 crore
  • West Bengal: Rs 417 crore

Pending Income Tax Refunds of Rs 62,361 crore paid to a total of 20,44,597 Taxpayers from 8th April to 30th June

Not only to health and freedom of movement, but the COVID-19 pandemic has also made a much larger financial impact on the economy for individuals and business entities (including MSMEs) across the world. Between 8th April to 30th June 2020 which had a total of 56 weekdays (Monday to Friday), the Income Tax Department of India has made 76 tax refunds per minute.

In total, more than Rs 62,361 crore has been refunded to Individual Taxpayers and Business Entities during this time period.  The complete Rs 62,361 crore of refunds were directly transferred into the bank accounts of the taxpayers.

19,07,853 Individual Taxpayers were paid a refund amounting to Rs 23,453.57 crore while 1,36,744 Business Entities were refunded a total of Rs 38,908.37 crore.

Background

On 8th April 2020, the Department of Revenue (under Union Ministry of Finance) issued a press note under which for Individual Taxpayers-all pending income tax refunds of up to Rs 5 lakh were asked to be refunded,  while for business entities-GST and Customs Refunds pending were also asked to be refunded to the Income Tax Department for providing immediate financial relief.