No GST grant for 2 months, NMC faces financial crisis
(NMC) is facing a severe financial crunch after failing to receive the mandatory goods and services tax (GST) compensatory grants from the state govt for two consecutive months—April and May—of the current financial year.In 2023–24, NMC received a monthly GST grant of Rs137 crore.
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For the 2024–25 financial year, the civic body anticipated an 8% hike, expecting monthly grants to rise to Rs148 crore. However, not a single rupee was disbursed in the first two months, severely impacting the NMC's ability to meet its financial commitments.According to NMC accounts and finance department officials, the civic body's average monthly expenditure is Rs148 crore. This includes salaries, pensions, electricity and water bills, and crucial payments to private agencies like AG Enviro and BVG India for door-to-door waste collection. Additionally, it covers remuneration for contract-based staff, including security guards, computer operators, and ex-servicemen deployed in the nuisance detection squad.A senior official, speaking on condition of anonymity, said the NMC so far managed to meet its financial obligations for April and May by dipping into its reserve funds, covering an estimated Rs296 crore. However, the situation remains precarious.The financial stress has already begun to show. Pension disbursement to retired employees, typically done on the first of each month, was delayed and only released on May 8. "If GST grants continue to be delayed, even employee salaries will be at risk," the official warned.Sources within NMC link the disruption in funds to the state govt's populist spending ahead of the upcoming assembly elections. "While the govt is announcing freebies, it is failing to release even the committed grants to urban local bodies. Rather than offering giveaways, the focus should be on long-term schemes to build employment skills for young women, farmers, and other marginalised groups," said the official.The delay has raised serious questions about state govt's fiscal discipline and its commitment to supporting civic bodies at a time when cities are grappling with mounting service demands.
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Hindustan Times
an hour ago
- Hindustan Times
Simpler GST structureas govt pushes reform
Prime Minister Narendra Modi on Friday announced a major overhaul of the goods and services tax regime, hinting at lower rates on most items by Diwali, with people aware of the plans adding that most of the goods currently taxed at 12% could drop to 5% and most of those in the 28% bracket could shift to 18% under a proposed structure that will also have a 40% rate for what are considered sin or luxury goods. Prime Minister Narendra Modi addresses the nation from the ramparts of Red Fort on 79th Independence Day, in New Delhi on Friday. (ANI) Speaking from the Red Fort ramparts on the 79th Independence Day, Modi said his government would implement 'next-generation GST reforms' that would substantially reduce the tax burden across the country, particularly benefiting farmers, the middle class and small businesses. Since GST is a consumption tax, the ultimate beneficiary will be the consumer. 'This Diwali, I am going to make it a double Diwali for you. This Diwali, you fellow countrymen are going to get a very big gift,' Modi said, adding that after eight years of GST operations, 'the need of the hour is that we should review it once.' People aware of the matter in the government later detailed the proposal: a simplified two-slab structure replacing the current four-tier system that has operated since GST's launch on July 1, 2017 is being considered. The reforms, according to these people, will make everyday essentials significantly more affordable — from groceries and medicines to televisions and washing machines. Agricultural equipment, bicycles, and even insurance and education services are set to become cheaper, delivering direct relief to households and farmers while boosting consumption across the economy. Under the proposed framework, most goods and services would be taxed under two categories — 5% and 18% rates — with a 40% 'demerit' levy on items that currently attract the compensation cess. This will effectively whittle down the existing structure that includes of 5%, 12%, 18% and 28% brackets, along with a compensation cess for luxury and sin goods. As per law, the compensation cess will cease to exist after March 31, 2026. The new 40% levy is being considered for the goods in the last category. The people cited above added that '99% of items' currently in the 12% slab will move to the lower 5% bracket, and 90% of goods in the 28% category will shift to 18%. The Centre has forwarded its proposals to the Group of Ministers examining rate rationalisation, which will place recommendations before the GST Council — the apex federal body on indirect taxation comprising finance ministers from all states and chaired by Union finance minister Nirmala Sitharaman. The council is empowered to accept the proposal, with or without modification, or reject it. 'We have discussed with states and we are bringing next-generation GST reforms that will reduce the tax burden across the country,' Modi said. 'Tax on items the common man uses will be reduced substantially. Our MSMEs will benefit hugely. Daily use items will become cheaper, which will also strengthen our economy.' One of the people cited above added that, 'there is a near consensus to rationalise the GST rates. Some opposition parties are even keen to reduce the number of slabs to just one, which is difficult in the Indian situation because tax rates for items used by the common people, and luxury items used by the rich cannot be the same.' This person added that the council is expected to meet by October with a final decision, as indicated by Modi, expected prior to Diwali in the latter half of the month. The restructuring would make essential items such as food products, daily-use goods, agricultural equipment, televisions, refrigerators, washing machines, medicines, education and insurance significantly cheaper. 'The common man, particularly the middle class would be the biggest beneficiary,' the person mentioned above said, citing examples: Items currently taxed at 12% — including condensed milk, dried fruits, frozen vegetables, sausages, pasta, jams, namkeens including bhujiya, tooth powder, feeding bottles, carpets, umbrellas, bicycles, utensils, furniture, pencils, handbags made of jute or cotton, and footwear under ₹1,000 — could see rates drop to 5%. Similarly, goods in the 28% bracket such as cement, air-conditioning machines, dishwashers, monitors, projectors, set-top boxes and television sets including LCD and LED models could become cheaper at 18%. However, around half-a-dozen 'demerit' items, such as cigarettes and online gaming, would face a new 40% tax rate, replacing the current compensation cess structure. Special rates would remain unchanged, with diamonds continuing to attract 0.25% and gold and silver maintaining 3% taxation, which are mainly for exports after value addition. Petroleum products would stay outside the GST framework. 'We started the review by setting up a high-power committee and also held discussions with the states,' Modi explained during his address. With most states governed by the BJP and its allies, the proposals are expected to gain approval with some ease. Beyond rate rationalisation, the GST Council would also consider proposals for further ease of compliance using technology and faster refunds to exporters, officials said. Tax experts hailed the proposed changes as transformative for India's economic landscape. 'Moving to a two-rate GST structure will put India at par with advanced economies which have a low rate for essentials and another rate for everything else,' said MS Mani, partner at Deloitte India. 'Classification issues and disputes will significantly reduce if we get a two-rate structure.' However, Mani cautioned that 'the absence of anti-profiteering provisions now would make it incumbent for businesses to self-regulate and pass on the reductions to the consumers.' Saurabh Agarwal, partner at EY India, described the reforms as 'essential structural changes' designed to build economic resilience. 'The Prime Minister's vision for GST 2.0 is a timely and strategic move to build a resilient Indian economy,' he said. 'By addressing the inverted duty structure, we are unlocking crucial working capital and making our exports more competitive on the global stage,' Agarwal added. 'Simultaneously, rationalising rates will boost domestic consumption, creating a powerful buffer against external shocks.' He said simplifying compliances for MSMEs would help bring down costs and make their products competitive in the market. 'These reforms will strengthen India's manufacturing capabilities and make our economy more self-reliant and agile in a volatile global landscape.' The government expects to offset revenue losses through an expanded tax base and improved compliance, with officials confident that the broader economic benefits would quickly compensate for any initial revenue shortfall. The announcement marks the most significant reform to India's indirect tax structure since GST's introduction eight years ago, which at the time merged a web of local and federal levies into a simpler system.
Economic Times
an hour ago
- Economic Times
Celebrating freedom with reforms: Modi promises advancements in defence, technology, manufacturing, and major development schemes
Narendra Modi government is gearing up for next GST reforms by October. On Independence day, Modi unveiled Rs 1 lakh crore jobs programme. PM also assured the nation that India will become the third-largest economy soon. PM Viksit Bharat Rozgar Yojana will facilitate creation of 35 million jobs. Government will constitute task force to look into next-generation economic reforms. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Prime Minister Narendra Modi announced a 'Diwali gift' for the people two months ahead of the festival, declaring that the next set of goods and services tax (GST) reforms will be in place by October, besides underscoring a renewed reforms push, emphasising Atmanirbhar (self-reliant) Bharat as the bedrock on which Viksit Bharat will be built by 2047, and unveiling a Rs 1-lakh crore jobs programme, among other his 12th Independence Day speech that lasted 103 minutes, the Prime Minister also assured the nation he will soon declare from the Red Fort that India has become the third-largest economy in the the Opposition's charge of high unemployment, Modi also said the PM Viksit Bharat Rozgar Yojana being launched on Independence Day will facilitate the creation of 35 million Friday, he said, 'This Diwali, you are going to get a big gift. We are coming with the next generation of GST reforms.' The announcement comes close on the heels of parliamentary approval for two key items of legislation — the Income Tax (No 2) Bill and the Taxation Laws (Amendment) Bill — earlier this week. A total of 280 sections have been abolished in the Income Tax Prime Minister said the government has decided to constitute a task force to look into the prospects of next-generation economic reforms within a set time frame. 'Current rules, laws, policies, and procedures must be redrafted to suit the 21st century, to fit the global environment and to align with the vision of making Bharat a developed nation by 2047,' he PM said the policy changes will reduce compliance costs, besides boosting startups and small and cottage industries. Other benefits will include a smoother export process, improved logistics and systems, and the abolition of archaic laws that led to imprisonment for minor matters. Modi urged all sections, including political parties, his rivals and fellow leaders, to take part in the efforts to build a bright future.'I wish to tell my countrymen, everything I am doing, I am doing for the country, not for myself, not to harm anyone,' he said. 'Whether it is structural reforms, regulatory reforms, policy reforms, process reforms, or the need for constitutional reforms, we have made every kind of reform our mission today.'Atmanirbhar Bharat is the bedrock on which Viksit Bharat will be built, he said. He asserted that Operation Sindoor, the Gaganyaan mission and the manufacture of indigenous semiconductors has proved the power of self-reliance.'The greater a nation's reliance on others, the more its freedom comes into question,' he said. 'Misfortune arises when dependency becomes a habit, when we do not even realise it, when we abandon self-reliance and become dependent on others. This habit is fraught with danger, and hence one must remain vigilant every moment to be self-reliant.'Made-in-India weapons and defence systems helped India during Operation Sindoor, the Prime Minister asserted.'The enemy had no inkling of what weapons and capabilities we possessed, what power was destroying them in the blink of an eye,' he said. 'Imagine if we were not self-reliant, could we have executed Operation Sindoor with such swiftness? We would have been plagued by worries over who might supply us, whether we would get the required equipment, and so on.'The Prime Minister also announced the Sudarshan Chakra Mission for creating a complete security cover for all civilian installations across the country in the near the 21st century is a 'technology-driven century,' it is imperative that India does not lag behind, the Prime Minister said, adding that every nation that mastered technology scaled the heights of development and attained new dimensions of economic lamented that although India began the process of building infrastructure for semiconductor manufacture six decades ago, the plan was stalled, delayed and shelved while other countries mastered the technology and strengthened their position.'Today we have freed ourselves from that burden and advanced the work on semiconductors in mission mode,' Modi said. 'Six different semiconductor units are taking shape on the ground, and we have already given the green signal to four new units.'India is becoming self-reliant in space technology as well, the Prime Minister stated.'We are also preparing for Aatmanirbhar Bharat Gaganyaan on our own in space,' he said. 'We are working towards building our own space station. And I am very proud of the reforms done in space recently. More than 300 startups in my country are now working only in the space sector and thousands of youth are working with full potential in those 300 startups.'He expressed satisfaction at the pace with which the National Manufacturing Mission was progressing and reiterated the importance of the 'vocal for local,' 'zero defect, zero effect' and 'lower price, higher value' the need for promoting indigenous products, Modi urged all traders and shopkeepers across the country to put up boards, saying 'Swadeshi goods sold here.'The new jobs programme is expected to create new employment opportunities for approximately 35 million youth.'Today, on August 15th, we are launching and implementing a scheme worth Rs 1 lakh crore for the youth of my country,' he said. 'The Pradhan Mantri Viksit Bharat Rozgar Yojana is being implemented today… Under this scheme, the government will give Rs 15,000 to the youth, to every son or daughter who gets a job in the private sector.'Companies that generate more jobs will also be given incentives under the scheme.
Time of India
2 hours ago
- Time of India
Celebrating freedom with reforms: Modi promises advancements in defence, technology, manufacturing, and major development schemes
Prime Minister Narendra Modi announced a 'Diwali gift' for the people two months ahead of the festival, declaring that the next set of goods and services tax (GST) reforms will be in place by October, besides underscoring a renewed reforms push, emphasising Atmanirbhar (self-reliant) Bharat as the bedrock on which Viksit Bharat will be built by 2047, and unveiling a Rs 1-lakh crore jobs programme, among other initiatives. Independence Day 2025 Modi signals new push for tech independence with local chips Before Trump, British used tariffs to kill Indian textile Bank of Azad Hind: When Netaji Subhas Chandra Bose gave India its own currency In his 12th Independence Day speech that lasted 103 minutes, the Prime Minister also assured the nation he will soon declare from the Red Fort that India has become the third-largest economy in the world. Countering the Opposition's charge of high unemployment, Modi also said the PM Viksit Bharat Rozgar Yojana being launched on Independence Day will facilitate the creation of 35 million jobs. On Friday, he said, 'This Diwali, you are going to get a big gift. We are coming with the next generation of GST reforms.' The announcement comes close on the heels of parliamentary approval for two key items of legislation — the Income Tax (No 2) Bill and the Taxation Laws (Amendment) Bill — earlier this week. A total of 280 sections have been abolished in the Income Tax Act. The Prime Minister said the government has decided to constitute a task force to look into the prospects of next-generation economic reforms within a set time frame. 'Current rules, laws, policies, and procedures must be redrafted to suit the 21st century, to fit the global environment and to align with the vision of making Bharat a developed nation by 2047,' he said. The PM said the policy changes will reduce compliance costs, besides boosting startups and small and cottage industries. Other benefits will include a smoother export process, improved logistics and systems, and the abolition of archaic laws that led to imprisonment for minor matters. Modi urged all sections, including political parties, his rivals and fellow leaders, to take part in the efforts to build a bright future. Atmanirbhar Bharat 'I wish to tell my countrymen, everything I am doing, I am doing for the country, not for myself, not to harm anyone,' he said. 'Whether it is structural reforms, regulatory reforms, policy reforms, process reforms, or the need for constitutional reforms, we have made every kind of reform our mission today.' Atmanirbhar Bharat is the bedrock on which Viksit Bharat will be built, he said. He asserted that Operation Sindoor, the Gaganyaan mission and the manufacture of indigenous semiconductors has proved the power of self-reliance. 'The greater a nation's reliance on others, the more its freedom comes into question,' he said. 'Misfortune arises when dependency becomes a habit, when we do not even realise it, when we abandon self-reliance and become dependent on others. This habit is fraught with danger, and hence one must remain vigilant every moment to be self-reliant.' Made-in-India weapons and defence systems helped India during Operation Sindoor, the Prime Minister asserted. 'The enemy had no inkling of what weapons and capabilities we possessed, what power was destroying them in the blink of an eye,' he said. 'Imagine if we were not self-reliant, could we have executed Operation Sindoor with such swiftness? We would have been plagued by worries over who might supply us, whether we would get the required equipment, and so on.' The Prime Minister also announced the Sudarshan Chakra Mission for creating a complete security cover for all civilian installations across the country in the near future. Since the 21st century is a 'technology-driven century,' it is imperative that India does not lag behind, the Prime Minister said, adding that every nation that mastered technology scaled the heights of development and attained new dimensions of economic power. He lamented that although India began the process of building infrastructure for semiconductor manufacture six decades ago, the plan was stalled, delayed and shelved while other countries mastered the technology and strengthened their position. 'Today we have freed ourselves from that burden and advanced the work on semiconductors in mission mode,' Modi said. 'Six different semiconductor units are taking shape on the ground, and we have already given the green signal to four new units.' India is becoming self-reliant in space technology as well, the Prime Minister stated. 'We are also preparing for Aatmanirbhar Bharat Gaganyaan on our own in space,' he said. 'We are working towards building our own space station. And I am very proud of the reforms done in space recently. More than 300 startups in my country are now working only in the space sector and thousands of youth are working with full potential in those 300 startups.' He expressed satisfaction at the pace with which the National Manufacturing Mission was progressing and reiterated the importance of the 'vocal for local,' 'zero defect, zero effect' and 'lower price, higher value' themes. Underlining the need for promoting indigenous products, Modi urged all traders and shopkeepers across the country to put up boards, saying 'Swadeshi goods sold here.' The new jobs programme is expected to create new employment opportunities for approximately 35 million youth. 'Today, on August 15th, we are launching and implementing a scheme worth Rs 1 lakh crore for the youth of my country,' he said. 'The Pradhan Mantri Viksit Bharat Rozgar Yojana is being implemented today… Under this scheme, the government will give Rs 15,000 to the youth, to every son or daughter who gets a job in the private sector.' Companies that generate more jobs will also be given incentives under the scheme.
