Finance Minister of India responded to CAG’s allegation of diversion of funds

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In this time of the pandemic, the economic condition of our country is not stable at all because much proportion of funds set aside for different tasks in the annual budget has been spent on this pandemic. The health sector, PPE kits, corona tests, and many more things have been some of the things in which the money has been consumed. After this, the government has also set aside around Rs 20 lakh crore for tackling this pandemic only. States in this pandemic are lacking funds and for the same, they have asked the central government for funds.

In this, the funds that are due to the states for the last two years, the CAG (Comptroller and Auditor General of India), has reported sometime earlier that the central government has short-credited these funds. According to them, these Rs 47,272 crore have been diverted. This statement of CAG has made the central government go through everything again. And to this statement, the Finance Minister of India has replied that there was a delay in the reconciliation of compensation. And the CAG can not define this delay as a diversion.

Finance Minister, added that according to them the dues that were there for states were fully compensated for both the years 2017-18 and 2018-19 but there was a delay in reconciliation. After this, the matter has taken a pause for a while but is expected to rise again in the next meeting of GST. This meeting is going to be on 5th October and the states with opposing parties are going to try to cover the BJP government in this. Some states like West Bengal and Kerala are from now only asking various questions from the central government regarding this matter and regarding this statement of CGA.

The account service is of the view that impermanent maintenance of GST pay receipt in CFI forthcoming compromise can’t be named as ‘redirection’. The pay because of the states for the two years was completely paid and the time taken in the compromise of remuneration receipts can’t be named as a preoccupation of the GST cess support.

According to the report of CAG, the central government has been able to store a total of Rs 2.75 lakh crore from various cesses and levies. These cesses are to be exact are 35. But according to CAG, the central government has used only 60% of these funds in 2018-19 and the rest 40% of the funds have been transferred to the Consolidated Fund of India (CFI) and these funds have been used by CFI for meeting general government expenditures.


Yet, as per the service, all sums including charges and cesses that are gathered by the Center get attributed first to the CFI, and simply from that point forward, it is moved to some other reserve through a spending head in the Union financial plan. “The administration puts forth all attempts to move all sums gathered before the finish of each monetary year into the Fund by making fundamental spending arrangements.”

Then, West Bengal Finance Minister Amit Mitra, responding to the disclosures in the CAG report, said “The Modi government has been found in the act by its own CAG for concealing Rs 47,272 crore from cess pay support implied for states. Guilefully put into CFI. Disregarding the GST Act. Why? To feign us by exaggerating income assortment and feign worldwide rating offices by downplaying financial shortage. Dishonorable.”

“CAG Report affirms illicit preoccupation of undistributed GST by GOI – an issue that the Council has talked about and has almost settled. In any case, it absolutely uncovered the twofold norms of GOI. When going is acceptable GOI abuse the excess and wash the hands when an impermanent deficiency shows up,” Kerala Finance Minister Thomas Isaac said in a tweet.

Numerous Opposition states are relied upon to bring the issue up in the following GST Council to meet on October 5.