Former Finance Minister P. Chidambaram on Tuesday lauded State governments for refusing to ‘accept’ the option of direct borrowing and asserted that the burden of additional borrowing must be borne by the Centre.
On August 27, during the GST Council meet, the Centre had expressed its inability to pay GST compensation to States this time for the loss of revenue and had asked State governments to borrow directly from the Reserve Bank of India (RBI).
In a series of tweets, Mr. Chidambaram called the options as “bogus” options.
“Congratulations to the finance ministers of Punjab, Chhattisgarh, Kerala, West Bengal, Telangana and Delhi for rejecting the bogus twin options given by the central government to bridge the GST Compensation gap. As far as I know, Rajasthan and Puducherry have also rejected the two options. Happy that Tamil Nadu has also rejected the two options,” Mr. Chidambaram said.
“The States must not allow the Centre to evade its legal and moral responsibility to compensate the States for the revenue shortfall. The financial burden of additional borrowing must be borne by the Centre,” he added.
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