Terming the two options proposed by the Union government as
“unconstitutional,” “illegal” and “a betrayal of the spirit of
cooperative federalism,” key opposition-ruled states pressed the
Centre to borrow in order to compensate states for the entire goods
and services tax (GST) shortfall ‘regardless of Act of God’.
While six states – Kerala, Telangana, Chhattisgarh, Delhi, Punjab
and West Bengal – huddled over a video-conference meeting on
Monday to thrash out a strategy to take on the Union government,
some states separately shot off letters to the Centre, expressing
disapproval of putting the onus of borrowings on states.
The finance ministry on Saturday officially communicated the finer
details of the two options to states to make up for the compensation
shortfall by way of borrowings.
The first option is to only borrow up to Rs 97,000 crore which is a
shortfall arising out of GST implementation via a special window by
the Reserve Bank of India. The other option is the entire Rs 2.35
trillion, which accounts for the Covid-19 situation through the issue
of market debt.
