New Delhi: West Bengal Chief Minister Mamata Banerjee on Wednesday wrote a letter to the Prime Minister Narendra Modi on Centre’s failure to pay Goods and Services Tax (GST) dues to states citing revenue shortfall, and urged him to “intervene” on the matter “to rekindle the trust between states and the Centre at the GST Council”.
“I am deeply anguished by the GST imbroglio, which tantamounts to a betrayal of the trust and moral responsibility of the Government of India towards the states, violating the very premise of federalism,” said Banerjee in the letter. ANI has a copy of the letter.
She said states gave up 70 per cent of their taxing powers to usher in the GST regime on the promise of full compensation of shortfall in GST collection for five years by the Central government on an agreed formula.
Centre alone can’t decide on lockdown in states. The state govt is the implementing authority & must be trusted. Only issuing directives isn’t enough. A district administration knows ground realities. It is the basis of our federalism so all must cooperate: West Bengal CM pic.twitter.com/vV7fFgZpuS
— ANI (@ANI) September 2, 2020
Banerjee added that, at a time when due to the pandemic many states are unable to pay salaries of their employees and pensions of their senior citizen, they are being “thrust with two unilateral options”, both of which require them to borrow a large amount of money.
“The Centre must borrow to meet the shortfall at this critical hour,” said Banerjee. She also added that the Central government have the power to monetise its debt, while the states do not hold the same power.
“Government of India gets a much lower interest on such borrowing while the interests on such borrowings by the state would be much higher,” said the chief minister.
She further said the Central government can raise the resource to service its debt, the states cannot service huge additional debts when their “finances are on the verge of collapse”. (ANI)
