West Bengal Chief Minister Mamata Banerjee on Wednesday wrote to Prime Minister Narendra Modi and said the denial of Goods and Services Tax...
West Bengal Chief Minister Mamata Banerjee on Wednesday wrote to Prime Minister Narendra Modi and said the denial of Goods and Services Tax compensation to the states was as an “insufferable blow to federalist policy of our nation”, PTI reported. The chief minister joined the demand by other non-BJP ruled states that the Centre should borrow to meet the compensation deficit.
In a letter, Banerjee criticised Attorney General KK Venugopal’s legal opinion that it was not the responsibility of the Centre to compensate the states for GST shortfall. She said this “appears to be an act of subterfuge”.
On August 27, Finance Minister Nirmala Sitharaman at the GST Council meeting had said that the crisis facing the states is an unforeseen “act of God”, referring to the coronavirus pandemic. The Centre offered two options for borrowing by states to meet the shortfall. As per its estimates, the states’ GST revenue gap in 2020-’21 will amount to about Rs 3 lakh crore, while cess collections are only projected to reach Rs 65,000 crore, leaving a shortfall of Rs 2.35 lakh crore.
The first option is to provide a special borrowing window to states, in consultation with the Reserve Bank of India, to provide Rs 97,000 crore at a reasonable interest rate....
