Political Muscle Being Flexed to Make States Agree to GST Options: Amit Mitra


File picture of West Bengal Finance Minister Amit Mitra.

The Centre has offered two choices to the states underneath which they will borrow from the market to make up for the estimated deficit of Rs 2.35 lakh crore this fiscal. After the 41st assembly of the GST Council on August 27, Nirmala Sitharaman had stated that the COVID-19 pandemic, which is an “Act of God”, has hit the economic system and GST assortment.

  • PTI
  • Last Updated: September 17, 2020, 12:08 PM IST

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Hitting out on the Centre over the GST compensation problem, West Bengal Finance Minister Amit Mitra alleged that political muscle was being flexed to make the states agree to the choices supplied to meet the income shortfall. If the 2 choices made out there by the Centre are compelled via with a majority vote on the subsequent GST Council assembly, “it will be a historic mistake for India”, Mitra stated.

The Centre has offered two choices to the states underneath which they will borrow from the market to make up for the estimated deficit of Rs 2.35 lakh crore this fiscal. After the 41st assembly of the GST Council on August 27, Union Finance Minister Nirmala Sitharaman had stated that the COVID-19 pandemic, which is an “Act of God”, has hit the economic system and GST assortment.


“…what happened in the five hours of discussion in the GST Council, no options were discussed. All of a sudden at the end of the meeting, two options were placed and the meeting ends. In other words, you are forcing the states into two options rather than three or four options. We felt there was a third option but nobody was there to listen,” Mitra stated in an interview to information web site The Wire lately. “Now, political muscle is being used what I would call muscular majoritarianism to get to states agree to one or two of the options. I cannot reveal whether we will go to court as a strategy,” he added.

He stated the Centre’s transfer would problem the very basis of the Goods and Services Tax, and if the GSTCouncil turns into a divided home, “the federalist spirit will breakdown”. “There will be distrust in place of trust. Therefore, the whole GST experiment on a consensus basis on the federalist polity will become a problem,” Mitra stated.

Of the estimated deficit, Rs 97,000 crore is on account of GST shortfall, whereas the remaining is due to the impression of COVID-19 on the economic system, in accordance to Revenue secretary Ajay Bhushan Pandey. A particular window may be offered to the states, in session with the RBI, at an inexpensive rate of interest for the borrowing of Rs 97,000 crore. The second choice earlier than the states is to borrow your complete Rs 2.35 lakh crore shortfall, the highest official had stated.

Mitra stated the states would not have the headroom to borrow to make up for the GST shortfall and, compelled by the corvid-19 pandemic and cyclone ‘Amphan’ in West Bengalparticularly, to simply survive. “I have gathered from the media that the Reserve Bank of India is saying it is much easier for the Government of India to borrow. I would also say that if they have a problem, they can monetise their debt but states cannot,” he stated.

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Shekh Shahrukh

Shekh Shahrukh is a digital marketer, Entrepreneur, and a Journalism student at Delhi University. A news writer by day and news seeker by night, he is loathed to discuss himself in a third person but can be persuaded to do so from time to time.

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