A day after welcoming the Centre’s decision to borrow money to compensate the States the GST dues, the Congress demanded clarity from Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman on the process.
Former Finance Minister P Chidambaram said there is no clarity on the balance of the gap in the GST compensation. He said the Finance Minister has written to the States that the Centre will borrow ₹1.10-lakh crore and give back-to-back loans to State governments. While he welcomed the change of heart, he felt “There is no clarity on the balance of the gap in the GST compensation. FM’s letter puts the number at ₹1.06-lakh crore for this financial year. There is no clarity on who will borrow the money and no clarity on how the debt will be serviced and repaid,” he said in Twitter.
How about shortfall?
Chidambaram maintained that States are opposed to borrowing on their own account.
“States are right. There is no difference between the first amount and the second amount. Centre must resolve the impasse immediately by offering the same terms for ₹ 1.06-lakh crore as it has now offered for ₹1.10-lakh crore,” he said and urged Modi and Sitharaman to take the second step also and re-establish the trust between the Centre and the States.
Later, addressing reporters, party spokesperson Supriya Shrinate charged that Modi and his team have “ensured that the economy has completely got ruined”.
“It is in complete shambles, today there is no demand, no consumption, no investment and hardly any jobs. In fact, some data suggests that 46 percent Indians are earning less than what they did before corona and the problem is not just corona alone, the problem is that there were problems that existed before the pandemic, which were not attended to and the virus outbreak deepened the crisis. Which is why, IMF says that Indian economy will contract by over 10 percent and revised its earlier forecast of 4.5 percent contraction, it is a cause of deep concern,” she said.