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GST Council meet: Congress says Centre thrusting its decisions on states

Congress on Thursday accused Centre of thrusting its decision on states to borrow money to bridge the funding gap created due to economic losses caused by COVID-19..

August 27, 2020 / 10:27 PM IST

The Congress on August 27 accused Centre of thrusting its decision on states regarding compensation for revenue shortfall by asking them to borrow money to meet the requirement.

The reactions came after a five-hour-long marathon meeting of the GST Council on Thursday which ended with Union Finance Minister Nirmala Sitharaman giving states two options to bridge the funding gap due to economic losses caused by COVID-19 pandemic.

The leaders said the decision asking states to borrow defeated the foundation of the GST regime which had promised to come to the rescue of states in a situation of revenue losses.

The two options given to states are a) to provide a special window to states, in consultation with Reserve Bank of India (RBI), to provide the Rs 97,000 crore at a reasonable rate of interest; this money can then be repaid after five years from the collection of cess and b) entire GST compensation gap of Rs 235,000 crore of this year could be met by the states, in consultation with Reserve Bank of India (RBI).