Representative image.

BENGALURU: Chief minister BS Yediyurappa’s self-imposed deadline of 100 days — made on November 3 — to change the face of Bengaluru is likely to hit a fund crunch as the Centre has made only part payment of the state’s dues of Goods and Services Tax ( GST ) compensation.

The Centre, which owed Karnataka Rs 7,039 crore for the periods August-September and October-November, released only Rs 3,669 crore on Monday. Officials said there is no word on when it would release the remaining Rs 3,370.

“In the present fiscal situation, it would be unrealistic to expect the CM to fulfil his promise of changing the face of Bengaluru or ushering in development,” said a finance department official.

Union finance minister Nirmala Sitharaman will chair a meeting of the GST Council on Wednesday, where states will discuss a rate hike. Home minister Basavaraj Bommai will represent Karnataka. Sources said the Centre made part payment ahead of the council meeting only to circumvent an onslaught by states at the meeting.

Representatives of states, especially non-BJP led ones like Maharashtra and Telangana, are expected to take the Centre to task. It remains to be seen if Bommai will effectively fight Karnataka’s cause.

“Lower tax compliance has prompted the Centre to propose a hike in GST rates and cess on all commodities other than luxury goods. Some states have opposed the move,” said S Prakash, former secretary of Karnataka State GST Practitioners Association.

Karnataka’s fund crunch has left many projects such as widening of roads, new waste management plans and drinking water schemes hanging in the balance. Yediyurappa had said the government requires at least Rs 6,000 crore to upgrade roads in Bengaluru alone. The government also needs at least Rs 38,000 crore for flood relief.

The economic slowdown has also effected revenue collection as most sectors are way behind targets set for 2019-20. Only commercial tax, with a collection of Rs 47,692 crore till November end, has shown moderate growth.

“The delay may cause some fiscal issues. It is likely to slow down major infrastructure projects,” said a senior official from finance department.

