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Home / India News / Chhattisgarh CM tells Centre to borrow to pay GST compensation

Chhattisgarh CM tells Centre to borrow to pay GST compensation

Bhupesh Baghel said that under the current circumstances, a more practical and logical step for the Central government would be to take a loan and provide GST compensation amounts to the states

india Updated: Aug 31, 2020, 23:11 IST
Ritesh Mishra
Ritesh Mishra
Hindustan Times, Raipur
Chhattisgarh Chief Minister Bhupesh Baghel also demanded that the Central Government should provide Rs 2,828 crore to Chhattisgarh as GST compensation amount for the year 2020-21.
Chhattisgarh Chief Minister Bhupesh Baghel also demanded that the Central Government should provide Rs 2,828 crore to Chhattisgarh as GST compensation amount for the year 2020-21. (HT File Photo)

Chhattisgarh Chief Minister Bhupesh Baghel on Monday asked the Union Government to borrow and pay off GST compensation to states, according to an official statement of the state government.

In a letter to Union finance minister Nirmala Sitharaman, Baghel has also demanded that the Central Government should provide Rs 2,828 crore to Chhattisgarh as GST compensation amount for the year 2020-21.

On the option of the State Government taking loan to deal with the shortage in GST compensation Baghel, said that the Central Government had assured the states in GST council in year 2017 that any shortage in state’s revenue after implementation of GST will be compensated till 2022. Hence, under the current circumstances, a more practical and logical step for the Central government would be to take a loan and provide GST compensation amounts to the states, the statement said.

Baghel in his letter to Sitaraman said that every year the states generally get an increased amount of revenue, and any shortage in this protected revenue should be compensated by the Central Government. For this, the Central government should be directly taking loan to provide GST compensation amount to the states, instead of advising the states to take loan.

He also said that since the Reserve Bank of India provides loans to each state on different interest rates, it would be more practical if the Central Government takes loan and provides it to the states.

The chief minister further stated in the letter that as per the constitutional provisions, it is the responsibility of the Central government to provide GST compensation amount. If states take the loan to meet the shortage of GST collection, then the financial burden would fall on the states, and as the Central government is responsible for payment of GST compensation amount, the loan repayment situation would become uncertain and complicated.

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