The unusual step of the central government invoking ‘act of God’ to appease the states on not being able to provide due cess compensation was unfortunate and unjustifiable, feel most legal experts and economists. Vijay L. Kelkar, chairman of the 13th finance commission, describes the finance minister’s stance as “bizarre”, while EY India chief policy advisor D.K. Srivastava says the analogy is most unfortunate. Balveer Arora, chairman, Centre for Multilevel Federalism, JNU, points out that there is no concept of ‘act of God’ in the Constitution and none in the GST Council Act. While states are continuing consultations with each other, many have written to finance minister Nirmala Sitharaman to convince her on the need for the Centre to take the initiative of borrowing and compensating the states for the shortfall in revenue due to the Covid lockdown that considerably halted economic activities across the country. So far indications are that the Centre is not willing to accommodate the states.
“The concept of ‘act of...
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