Thiruvananthapuram : The Centre’s GST Council decision to deny states their GST compensations approximating to Rs 2.35 lakh crore, will add to financial burden on states to a massive extent, said CPI(M) State Secretariat in a statement.
The fallout of the centre's decision would mean thousands of crores of rupees in losses for Kerala. There are dues to the tune of Rs 7,100 crores already pending against four months starting April up to 31 July. If the non-paying period be extended up to 31 December, the state will stand to lose an estimated Rs 9000 crore more in receipts. This means, if Centre stands its ground for the remaining whole of this year, Kerala will suffer over Rs 16,000 crores in losses. A financial blow of this kind would plunge states into a situation where paying for salaries and other routine expenses, would be rendered impossible.
The GST era was ushered in allowing the Centre to set tax rates and collect all the tax money. Prior to that, states held the power to decide its taxes and collect the revenue thereof. And now in a step further, the Centre seeks to sideline a specific provision in the GST law that seeks to make up for state losses in the new setting.
Incidentally, the Centre is grounded on the idea that, states should make borrowings from the central government to make up for shortages instead of having their dues paid to them. States like Kerala that have suffered natural disasters like floods multiple times and are struck by pandemic too, are already reeling under huge financial burden. Under these circumstances, if the centre that’s obliged to lend a helping hand, instead chooses to turn against and deny due amounts, the ciriss will eventually lead to a situation where covid mitigation measures, salaries, pensions and basic expenses will be hit roadblock. Several state governments have already registered their protest against the Centre’s devastating decision.
The Centre should become willing to change its stand. Everybody should come together in united protest against Centre’s decision that will plunge states into deeper crisises, the State Secretariat urged in its press release.
