Bhupesh Baghel: Planning to seek share in revenue if Centre privatises airports in Chhattisgarh | EXCLUSIVE

New Delhi: The Chhattisgarh government is planning to seek a share in revenue if the central government privatises airports in the state, Chief Minister Bhupesh Baghel said in an exclusive interview with Business Today. Baghel has also been demanding GST (Goods and Services Tax) compensation from the Centre for some time now. He said there has been a loss of revenue to the states due to the new tax system and that the Centre has not made any arrangements to compensate the loss in coming years.

Edited excerpts

How do you assess the current state of the economy of Chhattisgarh?

This year there is a situation of a revenue surplus in Chhattisgarh. The revenue of the state declined due to the second wave of COVID-19, but better financial management helped us in less borrowing. Even when there was an economic slowdown in the country, Chhattisgarh’s economy was doing well. During the pandemic, the state's development indicators were sound, markets were robust.

Agriculture and power are the key drivers for the growth of the state, and real estate, banking, and tourism are the other allied sectors providing impetus to economic growth.

What are the transformative policies that are in pipeline to boost the revenue of Chhattisgarh?

We have recently approved Chhattisgarh Electric Vehicle (EV) Policy 2022 to help make the state an EV manufacturing hub, provide employment opportunities, and protect the environment. The new policy will not only offer immense benefits to the buyers and manufacturers of EVs but also to those engaged in research and development. There will also be exemptions given to the manufacturers. We are also planning to formulate a policy for seeking a share in revenue if airports in the state are privatized by the central government.

How are you trying to bring down the fiscal deficit of Chhattisgarh?

Chhattisgarh's economy is in a good shape as compared to the bigger states of the country. The capital expenditure of the state has been continuously increasing and the fiscal deficit is also being reduced continuously as a result of better financial management and discipline. The gross fiscal deficit of the state is estimated at Rs 14,600 crore and a total revenue surplus of Rs 702 crore is estimated for the year FY 2022-23.

Sectors such as mining, excise, real estate, and transport contribute a great deal to the revenue. Revenue is also linked to the purchasing power of the people of the state. We worked on increasing the purchasing power of consumers, such as farmers, laborers, poor, by putting money into their pockets. In order to enable farmers to get the right price for their produce, input assistance is being provided under Rajiv Gandhi Kisan Nyay Yojana, along with the minimum support price.

What are the policy reforms you have taken to stabilise Chhattisgarh's financial health?

We have undertaken many policy reforms such as Industrial Policy 2019-24 which focuses on sustainable development and inclusive growth and Tourism Policy. The state, through the new industrial policy, is committed to promoting industrialization and a block-level development of industries across various sectors. The policy is committed to the development of backward areas of the state ensuring regional balanced growth.

We have also launched the ‘Narva Ghurva Garuva Badi’ (NGGB) scheme which is an innovative vision to uplift the rural economy and make it self-sustainable. The scheme ensures conservation of water, livestock management, use of compost promoting organic farming, and cultivation of vegetables in the backyard gardens.

How is Chhattisgarh attracting investment? Any big investment in the last four years?

We made 21 important amendments to our new industrial policy offering attractive impetus to boost economic growth. We have offered entrepreneurs special incentive packages, subsidies, and a separate space for MSMEs. We have included a start-up package to inject new technology into industries and create more jobs. The state government is providing large, mega, and ultra-mega industries full exemption in electricity duty on setting up industrial units in locations of any category. The state government has also reduced the land transfer fee and provided single window clearance.

Chhattisgarh has topped in attracting new investments mostly in the mining sector. Under the industrial policy, INR 84,000 crore worth of investment has been made in 1,950 industrial units and around 36000 jobs have been created in the last 3.5 years.

What is your view on GST compensation?

After the implementation of the GST tax system, the autonomy of states in shaping tax policies has become very limited and there is not much revenue-related potential in tax revenue other than commercial tax. Being a manufacturing state, our contribution to the development of the country’s economy is much more than those states which have benefited from the GST tax system due to higher consumption of goods and services. 

There has been a loss of revenue to the states due to the GST tax system, the Center has not made any arrangements to compensate the loss of revenue of about Rs 5,000 crore to the state in the coming year, so the GST compensation grant should be continued for the next 5 years even after June 2022. Due to this, it would be difficult to arrange for a shortfall in funds for the ongoing public welfare and development work in the state.