Delhi and five other states have rejected Centre’s proposal on GST compensation payment. The states have decided to write to Finance Minister Nirmala Sitharaman and Prime Minister Narendra Modi.
Sources told News18 that Punjab, Delhi, Kerala, West Bengal, Chhattisgarh and Telangana want Centre to borrow funds needed to pay off the states.
The Union finance ministry said in a statement released Saturday: “States will not have to pay either the principal or interest if they opt to borrow only Rs 97,000 crore to meet the shortfall in Goods and Services Tax (GST) compensation arising from GST implementation issues, but they will have to bear significant interest costs if they choose to borrow the entire shortfall of Rs 2.35 lakh crore, which includes revenue losses arising from the Covid-19 pandemic.”
Explaining details of the two options proposed to the states, the Centre’s communiqué to the states said, in case they opt for the second option to borrow Rs 2.35 lakh crore, they will have to pay interest from their own resources.
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