‘Allegation of playing politics hurts; we don’t oppose for the sake of opposing’

AM Jigeesh New Delhi | Updated on September 02, 2020

Punjab Finance Minister Manpreet Singh Bada

Punjab Finance Minister Manpreet Singh Badal is at the forefront of the Opposition camp in the fight for GST compensation due to the States. He has been arguing that the proposal for States to raise loans is not good for the future of the States and the Centre should find an amicable solution for the crisis in revenue generation.

Talking to BusinessLine, he suggested that the Centre form a group of finance ministers and a formula be worked out for the way forward. Excerpts:

Union Finance Minister Nirmala Sitharaman said the Congress and the Opposition are playing politics over the decisions of the GST council...

The last thing we do is to oppose a proposal for the sake of opposing. We have the Assemblies and Lok Sabha to play politics. The GST council is perceived to be apolitical. Most decisions taken at the council are arrived by consensus. The last thing on our mind is politics. I am saying this with a lot of responsibility and truthfulness. But at the same time, the two options given by the Centre are not legally tenable. Compensation is part of the Constitution. Even if there was total unanimity, they will still have to go to Parliament to amend the GST laws. All States are thinking on the same line, including the BJP-ruled States. They are silent because of their party.

Are you trying to evolve a consensus on this issue?

Yes, we are. But the Centre should be transparent in its proposals. We realise there are difficulties before the Centre. This is a very complex problem. Let us sit together. What we have suggested is that is it possible that the Government of India borrows and we continue with the compensation cess beyond five years? Seven, eight or nine years... Whatever it takes. Is that possible? It is shared sovereignty. We are upholding our sovereignty.

There were also talks about a separate pattern of taxation from the Opposition camps if the GST compensation is delayed further...

For us, the interest of India comes first, interest of the State comes second and the interest of the party comes third.

If the government of India does not have the money to pay compensation, it should say sorather than beating around the bush. Borrowing is not compensation. It is a problem created by the Centre. India is not a banana republic. This should not be the way fiscal or federal politics would work in a country that aspires to be a super power.

In a federal country, there is bound to be difference of opinions and things should not boil down to your word versus my word. It is time to activate the dispute resolution mechanism under the Constitution. We were told that GST will be a simple tax. It will spur growth, trade and exports. But none of this has happened. It is one of the complex taxes in the world with multiple rates. There is obviously something wrong with the way we govern or administer GST. The larger question I want to ask the Centre is, can we rework this? Ideally, no compensation would have been required. Punjab is ready to support any measures to help the fiscal health of both the States and the Centre. My suggestion is that to address the crisis, a group of finance ministers should be constituted and a formula should be worked out for the way forward.

The growth figures are historically low. How do you see this?

This is very serious. It is important that we fix our tax system. Unless we can get this right, we will never have the confidence of investors. We need to keep our ears to the ground. We need to keep listening to the stakeholders.

That is the way forward. There is a huge gap between the ground reality and policy decisions.

There’s a certain degree of arrogance among the bureaucracy and the political class. We need to take that out to address the problems in economy.

Published on September 02, 2020

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