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No dispute, may have difference over state’s compensation: Sitharaman after GST Council meet
During a media briefing on Monday after the GST (Goods and Services Tax) Council meeting ended, finance minister Nirmala Sitharaman said there may be difference over state’s compensation, however, there is no dispute.
During a media briefing on Monday after the GST (Goods and Services Tax) Council meeting ended, finance minister Nirmala Sitharaman said there may be difference over state’s compensation, however, there is no dispute.
During the 42nd GST Council meeting held on Monday, several agendas were discussed including issue of borrowing, extension of cess and more.
At the meeting, which went on for hours, the council could not arrive at a consensus to make up for the GST shortfall of states. “We were not able to arrive at a consensus,” Sitharaman said after the meeting. “I appealed to all states, we have to quickly give answers to states who are fighting Covid-19 on the ground and who want money in their hands. That is how the GST Council meeting ended today,” she added.
Earlier today, Sitharaman had announced a Rs 73,000 crore package to stimulate consumer spending in the economy as a measure to tackle the slowdown cause by coronavirus (Covid-19) pandemic.
Here’s what finance minister Nirmala Sitharaman said during the press conference:
- Today’s meeting was a continuation of the 42nd GST Council meeting, to discuss one agenda item - 9A. Discussions went on the issue of borrowing, extension of cess and so on: Finance minister Nirmala Sitharaman
- States asked some specific clarifications, which were given. Many of the clarifications were on the Attorney General’s opinion on borrowing, GST Council’s authority to extend cess collection beyond 5 years: Finance minister Nirmala Sitharaman
- No consensus arrived at on way to make up for GST shortfall of states: FM Nirmala Sitharaman
- The collection of cess is inadequate for paying compensation. This is absolutely apparent for everyone to see and because it is something which was never envisaged, the shortfall will be now be met by borrowing: FM Nirmala Sitharaman
- There was no consensus arrived on a matter on which differences exist. The GST Council can certainly take a call on cess, collection of cess, extending the period of collecting the cess and so on. That was repeatedly reiterated: Finance minister Nirmala Sitharaman
- Centre has issued the borrowing calendar. If I go beyond the calendar, it will immediately jack up the bond deals. The g sec yield will go up and if this went up then the borrowing cost will increase: Finance minister Nirmala Sitharaman
- Increased borrowed costs is not something we can afford at a time when India is looking at more money to invest and to borrow to do business. The impact would not be as severe if states were to borrow: Finance minister Nirmala Sitharaman
- States borrowing does not mean a chaotic situation, we will facilitate states so that some states end up paying high-interest rates while others obtain loans at a reasonable rate: Finance minister Nirmala Sitharaman
- We were not able to arrive at a consensus. I appealed to all states, we have to quickly give answers to states who are fighting Covid-19 on the ground and who want money in their hands. That is how the GST Council meeting ended today: Finance minister Nirmala Sitharaman
- We are open to anyone (State) who wants us to facilitate any loan. A lot of people have chosen Option 1, and some will approach us tomorrow morning. We are ready to deal with it: Finance minister Nirmala Sitharaman
