Kerala: Rs 1,404 crore received as additional settlement of tax refunds

Thiruvananthapuram: Providing some relief to cash-strapped Kerala, the Central government on Friday released Rs 1,404.50 crore as additional tax refund instalment. The Center released a total of Rs 72,961.21 crore for 28 states.

An official statement from the Central Finance Department said that this approval has been given for the upcoming holidays and New Year. He said this would strengthen the ability of state governments to finance various social welfare measures and infrastructure development schemes. The final approval has been added to the refund quota which was released on December 11 and which is expiring for the states on January 10, 2024.

The state division revealed that Uttar Pradesh got the highest amount of Rs 13,088.51 crore, followed by Bihar (Rs 7,338.44 crore) and Madhya Pradesh (Rs 5,727.44 crore).

Last week, the Union Department of Expenditure (DOE) had extended the deadline to adjust the off-budget borrowing (OBB) of states. Based on this, the Center will not adjust the net borrowing limit (NBC) of about Rs 3,000 crore for Kerala in the OBB in the current financial year. This additional borrowing space was a relief for the state government, which has utilized almost all the NBC sanctioned till the third quarter of this year.

However, this amount will be adjusted in two tranches over the next two years. Earlier, the state had approached the Supreme Court seeking resolution of the dispute over distribution of central funds.