Centre should arrange funds if it is unable to provide GST compensation amount: Chhattisgarh CM to FM
Aug 31, 2020
Raipur (Chhattisgarh) [India], Aug 31 : Chhattisgarh Chief Minister Bhupesh Baghel has written a letter to Finance Minister Nirmala Sitharaman and urged the Centre to arrange funds "on its own" and not pressurise states to borrow in lieu of the GST compensation.
"If the Central Government is unable to provide GST compensation amount, then states should not be pressured to take a loan. Centre should arrange the money," the letter read.
The two borrowing options to meet the GST compensation requirement for 2020-21 consequent to the discussions in the 41st meeting of the GST Council held on August 27 has been communicated to states which could, in turn, communicate their preference within seven working days, the Finance Ministry said on Saturday.
A meeting of State Finance Secretaries with the Union Finance Secretary and Secretary (Expenditure) is scheduled to be held on September 1, 2020, for clarifying issues, if any.
The first option provides a special window to states in consultation with the Reserve Bank of India (RBI) to provide Rs 97,000 crore at a reasonable rate of interest. This money can then be repaid after five years from the collection of cess.
The second option is that the entire GST compensation gap of Rs 2.35 lakh of this year can be met by states in consultation with the RBI.
