Expressing her deep anguish, West Bengal Chief Minister Mamata Banerjee on Wednesday wrote to Prime Minister Narendra Modi asking the Centre to pay the GST dues to the state governments.
“I am deeply anguished by the GST imbroglio which tantamounts to a betrayal of trust and moral responsibility of the Government of India towards the states, violating the very premise of federalism… This is a travesty and an abrogation of the fundamental basis on which the states gave up 70 per cent of their taxing powers, including the entire VAT regime, to usher in the GST regime,” Banerjee wrote in the letter to Modi.
Banerjee said that the Union Finance Minister had said in March this year that the ‘Centre is duty bound’ to give compensations to the states and it was their ‘solemn commitment’.
Banerjee said despite the Centre’s assurance, the state governments are being thrust with two unilateral options, both of which require the states to borrow hefty amounts of money, especially at a time when most of them are unable to pay salaries to their employees with some even having to default on pensions to the senior citizens, leave alone spending on basic development activities for the people of the state.
“During the period of Covid-19 pandemic for the last six months, farmers, the unrecognised sectors, migrant workers, unemployed youth and the labour force have been facing acute crisis of survival. Instead of helping the states, is it proper for the Centre to stop assistance to the states and thrust more financial burden on them,” the CM asked.
She urged the PM to intervene in the matter to rekindle trust between the states and the Centre at the GST Council despite occasional differences on merit, cutting across party lines.
“The Centre must borrow to meet the shortfall at this crisis hour of the Covid-19 pandemic,” Banerjee said.
“On behalf of my state and other states, I sincerely urge you not to belie the trust between the states and the Centre on the matter of GST… I further urge you not to allow an insufferable blow to the federalist polity of our nation,” she added.