Govt clarifies on overdraft report
Source: The Sangai Express
Imphal, November 05 2021:
The State Government has clarified on matters relating to a news item published in some local dailies titled 'RBI warns State Government over Rs 500 crore overdraft' on November 5 .
In a statement issued today, the Finance Department has clarified that Overdraft (OD) and Ways and Means Advances (WMA) are a special facility provided by the Reserve Bank of India to all the State Governments for management of their cash positions and the RBI does not warn a State on their cash position but advises the State when a ban on treasury operations is likely.
The State Government has not been in any danger of a treasury ban in the last financial year or in the present financial year till date and no such 'warning' or 'advice' have been received by the State Government from RBI.
In addition to the monthly funds the State receives from the Central Government in the form of Revenue Deficit Grant and Share in Central Taxes, the State also gets its own tax and non-tax resources amounting to an average of Rs 100-120 crore per month.
Therefore the claim made by the news report that the Government is run only on entitlement from the Government of India is false, added the statement.
The Finance Department added that the State Government has also been meeting and will continue to meet its committed expenditure including salaries, pension, loan repayment etc along with developmental and social expenditure despite the severe resource constraints due to COVID-19 pandemic.
It is wrong to claim that the State will not be able to achieve this without a loan or a special package, added the statement.
The State has received the Revenue Deficit Grant of Rs 211 crore on November 3, 2021 from the Government of India but there is no record of the Rs 450 crore as reported in the news report.
The Finance Department also informed that OD on the State Government account happens when there is a mismatch of receipts and expenditure which may happen due to various reasons and not necessarily due to developmental programmes.