Asking states to borrow is 'skewed idea': Deve Gowda on GST shortfall

Former prime minister H D Deve Gowda on Sunday termed as a "skewed idea" Centre's suggestion that states can go for borrowing to make up for GST shortfall and said it cant be seen shirking its responsibility.

JD(S) patriarch also said that GST Council meeting held last week appeared to have furr disturbed already delicate relationship between states and central government.

" Centre's suggestion that states should borrow to make good expected shortfall of Rs 2.35 lakh crore in GST compensation this year has, expectedly, t gone down well," Gowda said in a statement.

ting that states were already under financial strain, he said "To ask states to borrow is a skewed idea" because in July 2017 y had given up ir right to levy taxes and had allowed Goods and Services Tax (GST) regime.

"y had agreed to do so because central government had assured to adequately compensate m. I tend to agree with argument that onus is on Centre to borrow and compensate states. It cant be seen shirking this responsibility," he said.

Centre on Saturday wrote to states suggesting options of borrowing money to make up for Rs 2.35 lakh crore shortfall in GST revenues expected in ongoing fiscal.

Two days after first making suggestion at GST Council meeting, Finance Ministry wrote to state governments saying y could borrow eir via a special window it will facilitate through RBI or raise debt from market.

Gowda said that besides GST, new formula for devolution of taxes under 15th Finance Commission had also created some disquiet. Many progressive states feel that y contribute more to central taxes but receive much less in return, he added.

central government which has often spoken of 'co- operative federalism' should eng states actively, and arrive at a consensus on all difficult matters, he said.

states and Centre being at loggerheads all too frequently does t augur well for our wellbeing as a nation, former prime minister said.

Finance Minister has spoken about 'Act of God', Gowda pointed out and said, "I agree with her. But, we cant sit back and wait for God to set right mess we often put ourselves in. As proverbial saying goes, God helps those who help mselves."

 " ecomy has been hit by COVID-19 pandemic, which is an "Act of God" and it will see a contraction in current fiscal,"added Nirmala Sitharaman, Union Finance Minister.

(Im Credits:PTI)