GST compensation: Siddaramaiah targets CM Yediyurappa

Karnataka Chief Minister B S Yediyurappa "lacks courage" to fight against "the injustice", senior Congress leader Siddaramiah claimed on Thursday, as he hit out at the state government for accepting the Centre's option of borrowing to meet the shortfall in GST revenues. In a series of tweets, the Leader of the Opposition in the state assembly also accused the Centre of "running away" from the crisis, saying the Goods and Services Tax (GST) was conceived on the foundations of mutual trust.

"@bsybjp (Yediyurappa) lack courage to fight against the injustice. His lust for position has replaced his spine and this has made him to accept Rs. 97,000 Cr formula.

"Does this mean he is willing to forgo additional gap which is pictured as loss due to pandemic and betray Kannadigas?" Siddaramaiah asked.

There was no way to determine the exact loss due to pandemic or recession or GST implementation, he said, adding GST Compensation Act mandates the Centre to pay the gap to states without any rider and the Narendra Modi government should honour its commitment.

"@narendramodi govt should raise loan to compensate for complete GST gap instead of just Rs. 97,000 Cr. This way he can at least attempt to fulfill one promise," he said in another tweet.

BJP ruled Karnataka on Wednesday had said it has decided to opt for the first among the two options provided by the Centre for borrowing to meet the shortfall in GST revenues, under which the state will be eligible for a total compensation of Rs 18,289 crore. Several non-BJP ruled states have rejected the Centre's suggestion of states borrowing to make up for the GST shortfall, saying the constitutional liability lies with the Union government.

Noting that GST was conceived on the foundations of mutual trust, Siddaramaiah said, "Running away attitude of @narendramodi govt, during the crisis, is a threat to cooperative federalism. Safeguarding @BJP4India from being exposed is the main task given to BJP ruled states and our Yediyurappa is obliging to it."

Following the GST council meeting last week, the Centre had written to states suggesting options of borrowing money to make up for the Rs 2.35 lakh crore shortfall in GST revenues expected in the ongoing fiscal. The Centre has estimated that of this Rs 2.35 lakh crore, Rs 97,000 crore compensation requirement is due to GST rollout and the remaining is on account of the impact of COVID-19 on the economy. Giving two options, it had said states can borrow either Rs 97,000 crore the deficit arising out of GST implementation or the entire Rs 2.35 lakh crore.