Tribune News Service
New Delhi, August 27
States have sought per week to deliberate on two choices supplied by the Centre to make up for the shortfall in GST collections, stated Union Finance Minister Nirmala Sitharaman on the finish of a five-hour assembly of the GST Council right here in the present day.
The Centre might compensate the states by extending the interval for the refund of cess past the five-year-period that ends in 2022. “The Centre may convene another GST Council meeting once the states have decided their options and the RBI agrees to the Centre’s proposal,” Sitharaman stated.
As a results of a tanking economic system as a result of “hand of God” which can led to a contraction, the compensation hole this 12 months was anticipated to be Rs 2.35 lakh crore, she stated.
But based on the Centre’s calculations, Rs 1,38,000 crore is because of losses due to the pandemic.
Therefore, the Centre has estimated the shortfall in compensation as a result of Covid at Rs 97,000 crore beneath the primary choice. States going for this window can borrow 0.5 per cent of their state GDP sans the conditionalities prescribed earlier.
“Under the second option, the entire gap of this year can be met by the borrowing of states, and arrangements could be made with the RBI,” stated Sitharaman, however implied reforms in energy tariff and so forth. She
complimented the members on the GST Council for displaying statesmanship by specializing in the problem at hand.
Don’t thrust options
“I appeal to the Centre not to thrust solutions on us. We are a sovereign state, not a banana republic.”— Manpreet Badal, Finance Minister, Punjab
Council not consensual
“Sad state of affairs. GST Council is increasingly yielding to majoritarianism instead of being consensual.”— Bhupesh Baghel, Chhattisgarh Chief Minister
“The Centre is not helping the revenue-starved states by honouring its commitment on compensation.” — V Narayanasamy, Puducherry Chief Minister