New Delhi: Ahead of the GST council meeting scheduled for Thursday, the Congress on Tuesday accused the Centre of "massive mismanagement" of the Indian economy during the COVID-19 pandemic, and demanded 14 per cent compensation for the states as mandated in the GST Compensation Act.
While addressing a press conference, Congress leader and Punjab's Finance Minister, Manpreet Badal alleged that the Attorney General has authored an opinion of the Centre having no obligation on their part to pay the promised compensation.
"We take a strong exception that India's revenue secretary goes to Attorney General to get a view that there is no obligation on the part of Government of India to pay compensation which is the part of Constitution. If you are not willing to, I feel this amounts to a sovereign default, it is worse than that because the Constitution is being undermined," he said.
He also informed that the Punjab Government will seek full and timely GST compensation from the Centre in the next GST Council meet. He said, "Government of India owes Rs 4,400 crore for a small state like Punjab for which the total salary bill is Rs 1,800 crore. It is getting difficult for us to run the state. BJP government has no respect for Indian constitution or for Institutions, or for the people of India."
He alleged that whenever states ask for support to tackle the COVID crisis, the Centre asks them to "borrow" more money, while stating that it does not have funds to pay the 14% GST compensation which it is statutorily mandated to pay to the states.
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Former Finance Minister of Karnataka, Krishna Byre Gowda, who was also present in the meeting, said, "The nature and scale of distress to the state finances caused during the pandemic are unprecedented. Compensation has been an agreed law, laid down. Centre owes a state like Karnataka around Rs 13,000 crore. Karnataka is looking at floods and its damages to crops, life and livestock."
He accused the central government of being "completely absent" when needed, while asserting the need of paying money to the states to develop proactive solutions to these issues.
Taking a dig at Prime Minister Narendra Modi over the matter, Congress leader Rajeev Gowda said, "The India economy was already experiencing a 'Modi Slump' before Centre's bungling triggered 'Covid Collapse'. India's states are going to pay the price for Centre's incompetence. But Modi ji, like Nero, who fiddled while Rome burnt, is focussed on feeding peacocks."
Congress demanded that the Centre compensate states for Rs 6 lakh crore loss and pay states the compensation of 14% as mandated by the GST Compensation Act. "Anything less is a betrayal of the faith of India's states," said Gowda.
He further added, "Extend GST compensation cess collection to 10 years. Any borrowing that needs to be done to help tide over COVID crisis must be done by the central government. It can raise resources at lower cost and can bear the debt burden better than states. Reduce the reliance on cesses and share the revenues fairly. It is high time that Centre-State fund sharing formula from Finance Commission becomes a reality."
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