Political muscle being flexed to make states agree to GST options: Amit Mitra

Hitting out at Centre over GST compensation issue, West Bengal Finance Minister Amit Mitra alleged that political muscle was being flexed to make states agree to options offered to meet revenue shortfall.

If two options me available by Centre are forced through with a majority vote at next GST Council meeting, "it will be a historic mistake for India", Mitra said.

Centre has presented two options to states under which y can borrow from market to make up for estimated deficit of Rs 2.35 lakh crore this fiscal.

After 41st meeting of GST Council on August 27, Union Finance Minister Nirmala Sitharaman h said that COVID-19 pandemic, which is an "Act of God", has hit ecomy and GST collection.

"...what happened in five hours of discussion in GST Council, options were discussed. All of a sudden at end of meeting, two options were placed and meeting ends. In or words, you are forcing states into two options rar than three or four options. We felt re was a third option but body was re to listen," Mitra said in an interview to news website Wire recently.

"w, political muscle is being used what I would call muscular majoritarianism to get to states agree to one or two of options. I cant reveal wher we will go to court as a strategy," he ded.

He said Centre's move would challenge very foundation of Goods and Services Tax, and if GST Council becomes a divided house, " federalist spirit will breakdown".

"re will be distrust in place of trust. refore, whole GST experiment on a consensus basis on federalist polity will become a problem," Mitra said.

Of estimated deficit, Rs 97,000 crore is on account of GST shortfall, while rest is due to impact of COVID-19 on ecomy, according to Revenue Secretary Ajay Bhushan Pandey.

A special window can be provided to states, in consultation with RBI, at a reasonable interest rate for borrowing of Rs 97,000 crore. second option before states is to borrow entire Rs 2.35 lakh crore shortfall, top official h said.

Mitra said states do t have heroom to borrow to make up for GST shortfall and, compelled by COVID-19 pandemic and cyclone 'Amphan' in West Bengal particularly, to just survive.

"I have gared from media that Reserve Bank of India is saying it is much easier for Government of India to borrow. I would also say that if y have a problem, y can monetise ir debt but states cant," he said.