BENGALURU: Even as the Opposition-ruled states have publicly rejected the GST Council’s two borrowing options for states to make good the GST compensation shortfall, BJP-ruled Karnataka is yet to decide on its course of action. An impromptu meeting held at Chief Minister B S Yediyurappa’s official residence ‘Cauvery’ on Tuesday, where the state’s representative to the GST Council and Home Minister Basavaraj Bommai, Chief Secretary T M Vijaya Bhaskar and Additional Chief Secretary-Finance I S N Prasad were present to discuss and weigh in both options, remained inconclusive. The CM has called for another meeting on Wednesday to zero in on the way forward.

Only non-BJP states opposing borrowing options, says Bommai

Insisting  that it cannot pay compensation to states due to dip in revenue collection, estimated at Rs 2.35 lakh crore for the 2020-2021 fiscal, the GST Council has asked states to raise loans. The states can either borrow Rs 97,000 crore, the losses estimated to be arising from the implementation of GST regime, at reasonable interest rates where the principal and interest payments can be paid from the cess collection post 2022. The second option is to borrow the entire sum of estimated shortfall of Rs 2.35 lakh crore — arising out of an “Act of God”, as spelt out by Finance Minister Nirmala Sitharaman — with a catch that the states will have to bear the cost of interest.

After insisting that the Centre itself should borrow and pay compensation to the states, Bommai, like other state representatives in the recent GST Council meeting, had sought the Centre’s two options in written format. On Tuesday, the terms and conditions laid out by the Council for borrowing was discussed. “All states opposing the options are non-BJP states, but we are in the process of considering both options. Chief Minister B S Yediyurappa will take a call on it,” Bommai told The New Indian Express on Monday.

Bommai had argued that Karnataka’s revenue collections were better than other states despite the pandemic. As per the numbers released by Union Finance Ministry on Tuesday, of the gross GST revenue collections of Rs 86,448 crore till August, Rs 5,502 crore came from Karnataka. In the corresponding period last year, the state had collected Rs 6,201 crore. Karnataka’s GST revenue has fallen 11 per cent compared to last year.

Khader slams Centre

Mangaluru: Congress leader UT Khader on Tuesday slammed the Centre for refusing to give the states their share from GST collection and instead asking them to borrow loans from RBI. Addressing a press meet, he said the development is clear indication that the Centre has completely failed in administration and hence is trying to shy away from its responsibilities. “GST share is not alms, it is states’ right and we are seeking it,” he said. Referring to Union Finance Minister Nirmala Sitharaman terming the Covid crisis as an ‘Act of God’, he asked if the Centre gave same excuse for the fall in GDP, inflation, deteriorating economy and loss of jobs. “It is not an Act of God but an Act of fraud,” he alleged. He said Congress party since the beginning had maintained that GST is a best policy that was badly implemented. He alleged that the government did not bother putting things in order.