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“I welcomed the change of heart,” he tweeted and requested the Centre to make clear how the debt of states might be serviced and repaid
After the Union authorities agreed to borrow ₹1.10 lakh crore on behalf of States to meet the GST shortfall, Congress chief P. Chidambaram mentioned Friday that the Centre has taken the “correct first step” and it should now work to re-establish trust with them.
“I welcomed the change of heart,” he tweeted and requested the Centre to make clear how the debt of states might be serviced and repaid.
“Having taken the correct first step, I urge the PM and the FM to take the second step also and re-establish the trust between the Centre and the States,” the previous Finance Minister mentioned on Twitter.
He mentioned Union Finance Minister Nirmala Sitharaman has written to the States that the central authorities will borrow ₹1,10,208 crore and provides them “back-to-back loans”.
Also learn | Centre used GST compensation cess elsewhere, violated regulation: CAG
“There is no clarity on the balance of the gap in the GST compensation. FM’s letter puts the number at ₹1,06,830 crore for this financial year. There is no clarity on who will borrow the money and no clarity on how the debt will be serviced and repaid.
“States are opposed to borrowing on their own account. States are right. There is no difference between the first amount and the second amount,” Mr. Chidambaram mentioned.
He requested the Centre to resolve the deadlock instantly by providing the identical phrases for ₹1,06,830 crore because it has now provided for ₹1,10,208 crore.
On Thursday, the central authorities introduced that it’ll borrow up to ₹1.10 lakh crore on behalf of the states to bridge the shortfall in GST collections.
A slowdown within the economic system since final fiscal has resulted in a drop within the Goods and Services Tax (GST) collections, upsetting the budgets of states which had given up their proper to levy native taxes corresponding to gross sales tax or VAT when GST was launched in July 2017.
To make up for the shortfall, borrowing from the market was proposed however non-BJP States refused to settle for the proposal and requested the Centre to borrow as an alternative.
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