Article 280 of the Indian Constitution defines the financial relations between India’s central government and the individual state government. The Covid-19 pandemic scare has almost impacted the state’s resources and revenues as the centre is pushing itself back from providing any compensation relief to the states either on one or other pretext. The concerns began to escalate last October when the payments to states got delayed as GST revenues as per the arguments came in lower than expected.
A sum of 14,675 crores was collected as compensation cess in April- June, including 7,665 crores in June, if estimates of the centre are to be believed. Recently, Bihar’s Deputy Chief Minister Sushil Kumar Modi blamed the inability on the part of the centre to compensate revenue shortfalls on account of low GST collections in the wake of the Covid-19 pandemic, urging the centre to explore funding options to compensate the states.
Bihar will be heading for assembly polls a few months from now. It is one of the worst affected states battling Corona and the subsequent floods, severely affecting the lives and livelihood of many ordinary individuals. Do they count at all for the administrators? States like Punjab, West Bengal, and Kerala have repeatedly urged the centre to urgently admit and attend this matter as soon as possible in the best of the spirits of Cooperative Federalism.
The centre is on a high after the verdict of the apex court discouraging the transfer of funds collected under PM CARES Fund to the National Disaster Response Fund. The fund managed by the PM Cares Fund are those of charitable trust and thus entirely different. The states will not be assisted, coordinated, and cooperated with by the centre in regard to any financial aid and grant borne by the attitude, approach, and actions of the centre after the apex court judgment.
The opposition believes that Covid-19 has given momentum to the Modi led centre for unleashing its theatrics in the backdrop of ratcheting of rhetorics instilling a clear sense and display of patriotism and protectionism. They think that Aatmnirbhar is simply a ploy and plot to deflect and deviate people’s minds into believing and buying the propaganda.
The opposition parties are scheduled to organize a virtual GST meet on Thursday as sincere efforts have not been made by the centre to dispel the states’ causes and concerns in the best of its capacities.
The centre has informed the Parliamentary Standing Committee on Finance that it does not have the funds to pay the 14%GST compensation that it is statutorily mandated to pay to states. How does this part play?
Prolonging purposeful negotiations, dialogue, deliberation, and consultations between the centre and states to sort out their opinions in view of drawing the compensation is not entirely fair. I believe that the centre being stubborn doesn’t help at all as it ought to mend its code and conduct in dealing with issues of strategic interests and objectives, be it on the domestic turf or international front. GST is an important piece of legislation and this can be relegated by being pursued in such a size and manner.
Outcomes should articulate the aspirations of the stakeholders if not all, Mr Prime Minister.