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

    Kolkata, Sep 17 (PTI) Hitting out at the Centre over
the GST compensation issue, West Bengal Finance Minister Amit
Mitra alleged that political muscle was being flexed to make
the states agree to the options offered to meet the revenue
    If the two options made available by the Centre are
forced through with a majority vote at the next GST Council
meeting, "it will be a historic mistake for India", Mitra
    The Centre has presented two options to the states
under which they can borrow from the market to make up for the
estimated deficit of Rs 2.35 lakh crore this fiscal.
    After the 41st meeting of the GST Council on August
27, Union Finance Minister Nirmala Sitharaman had said that
the COVID-19 pandemic, which is an "Act of God", has hit the
economy and GST collection.
    "...what happened in the five hours of discussion in
the GST Council, no options were discussed. All of a sudden at
the end of the meeting, two options were placed and the
meeting ends. In other words, you are forcing the states into
two options rather than three or four options. We felt there
was a third option but nobody was there to listen," Mitra said
in an interview to news website The Wire recently.
    "Now, political muscle is being used what I would call
muscular majoritarianism to get to states agree to one or two
of the options. I cannot reveal whether we will go to court as
a strategy," he added.
    He said the Centre's move would challenge the very
foundation of the Goods and Services Tax, and if the GST
Council becomes a divided house, "the federalist spirit will
    "There will be distrust in place of trust. Therefore,
the whole GST experiment on a consensus basis on the
federalist polity will become a problem," Mitra said.
    Of the estimated deficit, Rs 97,000 crore is on
account of GST shortfall, while the rest is due to the impact
of COVID-19 on the economy, according to Revenue Secretary
Ajay Bhushan Pandey.
    A special window can be provided to the states, in
consultation with the RBI, at a reasonable interest rate for
the borrowing of Rs 97,000 crore. The second option before the
states is to borrow the entire Rs 2.35 lakh crore shortfall,
the top official had said.
    Mitra said the states do not have the headroom to
borrow to make up for the GST shortfall and, compelled by the
COVID-19 pandemic and cyclone 'Amphan' in West Bengal
particularly, to just survive.
    "I have gathered from the media that the Reserve Bank
of India is saying it is much easier for the Government of
India to borrow. I would also say that if they have a problem,
they can monetise their debt but states cannot," he said. PTI

(This story has not been edited by THE WEEK and is auto-generated from PTI)