GST losses: Mamata urges PM Modi to borrow cash to compensate states

Shubhadeep Choudhury                                                                              

Tribune News Service

Kolkata, September 2

Instead of forcing the states to borrow, the Centre ought to borrow cash to fulfill the shortfall in GST assortment and provides states the compensation promised to them on the time of implementation of the brand new tax regime.

West Bengal Chief Minister Mamata Banerjee at present wrote this to Prime Minister Narendra Modi.

In a letter addressed to Modi, Banerjee mentioned states would reciprocate by supporting a decision for continuation of cess assortment past 5 years until your complete debt of the Centre was utterly liquidated together with curiosity cost.

Mamata wrote that not like the Centre, states didn’t have the ability to monetise debt. The GoI additionally pays a a lot decrease fee of curiosity for such borrowings. GoI also can elevate assets to service debt, she argued.

States gave up 70 per cent of their taxing energy, together with VAT, to usher in GST, Mamata wrote, whereas including that “the only condition for giving up of all these powers was the promise of full compensation of shortfall in GST collection for five years under an agreed formula”.

Mamata wrote that the late BJP chief Arun Jaitley had acknowledged again in December 2013 that the only real motive why BJP was opposing the implementation of GST was as a result of it didn’t belief the then central authorities concerning honouring its dedication of compensating the states for losses.

“Today, his (Arun Jaitley’s) words are ringing in our ears as we are losing trust in the BJP government at the Centre,” Mamata wrote. She added that Modi himself, when he was Chief Minister of Gujarat, had opposed GST saying he didn’t think about the phrases of the UPA authorities then at energy on the Centre.

The Chief Minister wrote that two choices, being thrust on the states, would each entail borrowing lakhs and crores of rupees at a time when a number of the states have been unable even to pay salaries and pensions to workers, to not communicate of the neglect of growth works.

The Chief Minister urged the Prime Minister to intervene and “rekindle the trust between states and Centre at the GST council – a trust that had held for over three years and 40 meetings of the council”.

Mamata wrote that on behalf of all of the states of the nation together with her personal state, she would request him (Modi) to not belie the belief.

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