Rs761-cr GST compensation miserly, inadequate: Tosham MLA

Strap: Says state economy in ICU due to DeMo, faulty GST, lockdown

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Tribune News Service

Chandigarh, October 8

Senior Congress leader and MLA Tosham Kiran Choudhry today expressed her disappointment at the failure of the recent GST Council meeting in resolving the deadlock between union and states on the issue of properly compensating states for implementing GST.

She described as “miserly and inadequate” the amount of Rs 761 crore released this week to Haryana by the Union Ministry of Finance as compensation for implementing the GST.

Choudhry pointed out that as against an outstanding amount of Rs 5,841 crore, which had become overdue to the Haryana Government from the Centre for April to July 2020-21 on account of GST compensation, the amount of Rs 761 crore released by the Centre was peanuts.

The picture becomes starker in view of CAG observation in its report tabled in the previous assembly session in Haryana, that there was a shortfall of Rs 1,146 crore in GST compensation to Haryana up to March 2019.

Choudhry pointed out that in an agreement between union and states, it was envisaged that states would incur some losses during switchover from VAT to GST regime for which they would be suitably recompensed by the Centre, under the provisions of Goods and Services (Compensation) Act, 2017, to the extent their revenues fall short of 14% compounded growth for a period of five years with effect from the FY 2015-16.

Now due to unwarranted lockdown, the collections of the Centre have nosedived.

Choudhry pointed out that in the recent GST meeting, most of the non-BJP ruled states rightly refused to exercise either of these options of borrowing funds and urged the Centre to bail them out by providing them money out of its kitty.

She felt that as a “sovereign” entity, the Centre had all options of raising revenues not available to states — it could borrow from the RBI at discounted rates as a matter of right, access dividends and cash reserves of the RBI, ask the RBI to monetise or print the money or raise money by disinvestment in PSUs.

Taking a grim view of Haryana finances, Choudhry stated that the state economy was in the ICU due to demonetisation, a faulty GST and unwarranted lockdown. She urged the Centre to compensate Haryana in the full for losses suffered on account of GST.