COVID-19 an 'Act of God', economy to contract this fiscal: Finance Minister Nirmala Sitharaman
New Delhi: Finance Minister Nirmala Sitharaman on Thursday said the economy has been hit by the COVID-19 pandemic, which is an 'Act of God', and it will see a contraction in the current fiscal.
As per the Centre's calculations, states will be facing a shortfall of Rs 2.35 lakh crore in GST revenues in 2020-21.
Briefing reporters after the 41st meeting of the GST Council, Sitharaman said the Centre will pay the states the compensation which strictly arises out of GST implementation.
In the current fiscal, the compensation requirement of states has been estimated at Rs 3 lakh crore, of which Rs 65,000 crore would be funded from the revenues garnered by levy of cess. This leaves a shortfall of Rs 2.35 lakh crore.
The Centre has estimated that of this Rs 2.35 lakh crore, Rs 97,000 crore compensation requirement is due to GST rollout and the remaining is on account of the impact of COVID-19 on the economy.
"This year we are facing an extraordinary situation that even below 10 per cent approximate estimation you are facing an 'Act of God' which might even result in a contraction of the economy...," Sitharaman said.
Earlier this week, the Reserve Bank had said that the contraction in economic activity was likely to continue in the second quarter of the current fiscal as upticks witnessed in May and June appears to have lost strength following reimposition of lockdowns to contain the coronavirus pandemic.
The government imposed a nationwide lockdown on March 25 to combat the pandemic. The lockdown was partially lifted and then reimposed by certain states to check the spread of the coronavirus infections.
The National Statistical Office is scheduled to release its estimates of GDP for the first quarter of this fiscal on August 31.
The growth projections for current fiscal by various agencies show a sharp contraction of the Indian economy ranging from (-)3.2 per cent to (-)9.5 per cent.
India's GDP growth has been slowing even before the outbreak of the pandemic. India's Gross Domestic Product (GDP) growth of 4.2 per cent in 2019-20 was the lowest since the global financial crisis more than a decade ago.
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Rickelton's ton in vain as SRH beat MI by 6 wickets
Mumbai (PTI): Ryan Rickelton's whirlwind unbeaten ton was overshadowed by Heinrich Klaasen's unbeaten 65 as Sunrisers Hyderabad defeated Mumbai Indians by six wickets in an IPL match here on Wednesday.
Chasing an imposing 244-run target, Travis Head (76 off 30) and Abhishek Sharma (45 off 24) shared 129 runs for the opening wicket to set the platform for SRH.
Klaasen (65 not out off 30 balls) then displayed his all-round hitting abilities to guide SRH home with the help of Nitish Kumar Reddy (21) and Salil Arora (30 not out off 10) in 18.4 overs.
Earlier, Rickelton's knock powered MI to 243 for five.
MI rode on a 93-run stand between Rickelton (123 not out off 55 balls) and Will Jacks (46 off 22) in 7.1 overs for the opening stand to power the side.
MI skipper Hardik Pandya scored a valuable 31 off 15 balls before being dismissed.
Praful Hinge (2/54), Eshan Malinga (1/29), Sakib Hasan (1/39) and Nitish Kumar Reddy (1/31) were the wicket-takers for SRH.
Brief Scores:
Mumbai Indian: 243 for 5 in 20 overs (Ryan Rickelton 123 not out; Praful Hinge 2/54).
Sunrisers Hyderabad: 249 for 4 in 18.4 overs (Travis Head 76, Heinrich Klaasen 65 not out; AM Ghazanfar 2/51).
