The two options given by the Centre to the States to bridge the GST compensation gap are unacceptable, say the Congress leader
Senior Congress leader P Chidambaram on Saturday took a dig at Finance Minister Nirmala Sitharaman over her ‘Act of God’ remarks on the economy, saying will “the FM as the Messenger of God” answer how should the “mismanagement” of the economy before the coronavirus pandemic be described.Ms. Sitharaman on Thursday had said the economy has been hit by the pandemic, which is an ‘Act of God’, and it will see a contraction in the current fiscal.Also read: Comment | In ‘act of god’, coercive not cooperative federalismTaking a swipe at Ms. Sitharaman over the remarks, Mr. Chidambaram said, “If the pandemic is an ‘Act of God’, how do we describe the mismanagement of the economy during 2017-18, 2018-19 and 2019-20. Before the pandemic struck India?”“Will the FM as the Messenger of God please answer?” the former Mr. finance minister asked.Mr. Chidambaram also slammed the Centre for asking states to borrow more to make up for revenue losses due to pending GST dues.He asserted that the two options given by the Modi government to the states to bridge the GST compensation gap are unacceptable.“Under the first option the states are asked to borrow by pledging their future receivables under Compensation cess. The financial burden falls entirely on the states,” Chidambaram said.“Under the second option, states are asked to borrow from the RBI window. It is more market borrowing, only by a different name. Again, the entire financial burden falls on the states,” he said in a series of tweets.Mr. Chidambaram claimed that the central government is absolving itself of any financial responsibility.This is a “gross betrayal” as well as a “direct violation of the law”, he alleged.
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