Baghel writes to FM, seeks restoring excise duty like before

Chhattisgarh Chief Minister Bhupesh Baghel has written a letter to Union Finance Minister Nirmala Sitaraman, requesting her to sanction excise duty to Chhattisgarh as it was provided before.

Baghel has stated in the letter that the year 2020-21 has been an extremely difficult financial year because of the Covid-19 pandemic. This year, due to the adverse impact of the pandemic on all economic activities, the state’s financial resources are expected to decrease by about 30 per cent, he said.

“In the Union Budget for the year 2021-22, reduction in excise duty of petroleum products, gold and silver and many other items has been announced along with the imposition of ‘Agricultural Infrastructure Development Cess’. This is expected to cause an additional loss of Rs 900 crore to Rs 1,000 crore to the state in the coming financial year,” Baghel said.

The Chief Minister further stated in the letter that the state is yet to receive the amount of Rs 3,700 crore in GST compensation fund from the Central government for the 2020-21 financial year.

After announcing 60 lakh tonnes rice quota for Chhattisgarh in the past, the Central government has reduced the rice quota of the state by 16 lakh tonnes, due to which the state is likely to suffer a huge loss in the disposal of additional paddy collected by the state.

The Chief Minister also stated in the letter that the decision to set up ‘Agricultural Infrastructure Development Cess’ is welcome, but the decision to reduce excise duty would certainly have adverse effect on the resources of the state.

The excise duty deduction would cause additional damage to the state and its public welfare programme. Baghel has requested the Finance Minister that in view of the limited resources available to the state as compared to the Centre, Chhattisgarh should be provided ex-gratia amount as excise duty. This would save the state from additional financial loss.