Gehlot writes to Modi, seek GST compensation to states for five more years
In a letter, Gehlot said the economic activities have resumed after the end of the nationwide lockdown imposed in March to check the pandemic, but they are far from reaching the normal levels. He added as such the payment of GST compensation to the states up to June 2022 be extended by five years.
Rajasthan chief minister Ashok Gehlot has written to Prime Minister Narendra Modi seeking the Goods and Services Tax (GST) compensation to the states for five more years and for their total revenue deficit. He cited the negative impact on the economy because of the Covid-19 pandemic and added the states should be allowed additional borrowing in the next financial year too.
In a letter, Gehlot said the economic activities have resumed after the end of the nationwide lockdown imposed in March to check the pandemic, but they are far from reaching the normal levels. He added as such the payment of GST compensation to the states up to June 2022 be extended by five years.
Gehlot said Rajasthan availed additional borrowing to the tune of 2% of the Gross State Domestic Product (GSDP) in the current financial year. He added a similar provision of 2% additional borrowing should be allowed in the next financial year as well to enable the state government to take care of the liabilities.
Gehlot said the negative impact of the pandemic on the economy would cause continued stunted growth. He added, as a result, the expected growth in GSDP would not be achieved and also the revenue streams would not reach desired levels.
The Centre, which on Monday released the 13th instalment of ₹6,000 crore to the states to meet GST compensation shortfall, allowed a special borrowing window in October 2020 to meet the estimated shortfall of ₹1.10 lakh crore in revenue due to the GST implementation in 2017.
