NEW DELHI: Monday’s GST Council meeting brought out the deep fissures between the Centre and the Opposition-governed states with finance minister Nirmala Sitharaman and some officials facing attacks over the issue of raising funds to compensate states.
Leading the charge was Kerala finance minister Thomas Isaac, along with his West Bengal counterpart Amit Mitra and Punjab’s Manpreet Badal, who demanded that the Centre should borrow funds in order to keep its promise of compensating states for five years in case collections grew at less than 14%.
On its part the Centre sought to assure the states that they will not be burdened as the compensation cess will take care of the liability.
But the marathon meeting did witness some angry exchanges, prompting a sharp retort by Sitharaman. “I was gently reminded that I cannot take anybody for granted… Although I don’t take anybody for granted,” she told reporters after the meeting.
Some of the Opposition-governed states also accused finance secretary Ajay Bhushan Pandey of abruptly ending the meeting, while 10 states were demanding that the burden of borrowing funds for paying the compensation should be on the Centre.
Some of the states protested and said the secretary was not empowered to close the meeting and sought division, prompting Sitharamanto intervene and convene a meeting next week. “The revenue secretary abruptly announced that the meeting had ended. This has never happened before,” Mitra told TOI. The charge was, however, countered with sources at the Centre saying that the meeting ended with the permission of the finance minister, as the last agenda item related to borrowings did not require the Council’s approval.
While suggesting that there were 20-21 states who had given their preference, Sitharaman suggested that the Centre did not want to force the matter. “The call for division didn’t come from me,” she said. The Opposition-governed states, however, did not seem to be relenting with Punjab government indicating that it may explore legal options. In his address, Kerala’s Isaac rejected the proposals and said that the in the last few years the Council has not lived up to the “high principles” of consensus.