West Bengal Finance Minister Amit Mitra on Sunday took a dig at Union Finance Minister Nirmala Sitharaman’s “Act of God” remarks and said asking States to borrow for the shortfall of the GST revenue is a “planned strategy” to destroy the economic health of the States and crush federalism.

“In the name of ‘Act of God’, a huge debt is being thrust on the States, which will destroy their financial health, crush federalism and then the brute power of centralism will come to the play,” he said at a virtual press conference.

Comment | In ‘act of god’, coercive not cooperative federalism

Options “completely unacceptable”

Mr. Mitra said the options made available to the States are “completely unacceptable” and has put them in a ‘'Catch 22’ situation. He said the argument that borrowing by the States will not impact their yield and the macro economy is a twisted one. “The rate at which the States will borrow is higher than at which the Centre borrows and it can monetise the borrowing.”

Mr. Mitra said except some about 15 big States had objected to Ms. Sitharaman’s suggestion that they should borrow and emphasised that the Centre should borrow instead. He also pointed out that on March 14, Ms. Sitharaman had said the Centre is duty-bound to compensate the States.

“Now what they are saying is just the opposite. Today what the Centre is saying is a complete subterfuge,” he said, adding that it amounts to breaking the trust of the States.

Citing a statement made by GST Network founder Nandan Nilekani before the GST Council, Mr. Mitra said Mr. Nilekani had said the revenue loss due to fraudulent transactions is ₹70,018 crore. “So is this an Act of God or an act of fraud?” he asked.