Tripura is facing a significant financial challenge following the discontinuation of Gap Assistance for States (GAP), with the state losing financial support of around Rs 4,000 crore annually, Finance Minister Pranajit Singha Roy said on Thursday.
The minister said the withdrawal of GAP assistance, following the recommendations of the 15th Finance Commission, had affected Tripura as well as several other states that had depended on the support to meet financial requirements.
“Tripura is a small state and we used to receive around Rs 4,000 crore every year. Over five years, this would have amounted to nearly Rs 20,000 crore. The discontinuation of the assistance has therefore created a major financial gap,” Singha Roy said.
He said the Finance Commission had advised states to strengthen their own revenue generation to make up for the shortfall. However, increasing state revenue substantially within a short period was not possible, he said.
According to the minister, the government is exploring new avenues to raise revenue, including attracting industries and expanding economic activity. He added that the state had not increased taxes or imposed any additional levy on people to address the financial gap.
Singha Roy said the state government had also sought assistance from the Centre. He had written to the Union Finance Minister, while Chief Minister Manik Saha had met Prime Minister Narendra Modi and presented a detailed report on Tripura's financial situation, he said.
Following these efforts, a scheme was introduced to provide financial assistance to states for development-related expenditure. Under the scheme, Rs 3,550 crore has been approved for Tripura, the minister said.
However, he clarified that the amount should not be treated as a direct replacement for the annual Rs 4,000-crore GAP assistance.
The approved funds may be used for ongoing development projects and, where permissible, to meet the state's matching-share requirements under centrally sponsored schemes. This could reduce pressure on the state's own budget and free up resources for other sectors.
Singha Roy said the potential financial relief from such utilisation could be around Rs 2,000 crore, although he stressed that the figure was only an estimate and the actual savings could vary depending on how the funds are utilised.
