Former West Bengal minister Amit Mitra has written to Union Finance Minister Nirmala Sitharaman, urging her to proceed with the Goods and Services Tax (GST) compensation to states for one more 3-5 years after this month. Mitra, the principal chief advisor to Chief Minister Mamata Banerjee and the state finance division, mentioned the extension of the compensatory association will present a giant aid to the states.
“We note with dismay and ominous signs that the Centre has decided to withdraw the goods and services tax (GST) compensation to the states from July 2022. Such a decision, if taken, is completely contrary to what was envisaged at the time of adoption of GST,” Mitra wrote within the two-page letter on Monday. He claimed that every one states, throughout all political events, determined to undertake GST on the situation that the Centre would compensate them for income loss for 5 years.
“You will appreciate that in 2016 when the said decision was made, none of us could have predicted that the world would be hit by the Covid pandemic of this magnitude. Nor could we have guessed that the economy of the world and of course, that of India, would under be unprecedented stress, due to this pandemic,” he mentioned within the letter to Sitharaman.
Mitra, the then finance minister of West Bengal, was additionally the chairperson of an empowered committee of finance ministers that met in Kolkata on June 14, 2016, to deliberate on whether or not the GST could possibly be adopted by the states and the Centre.”It so occurred that I used to be then the chairperson of the empowered committee of finance ministers of states, which took this landmark determination. Subsequently, the then union finance minister and I, on behalf of all of the states, made the announcement earlier than the media about our unanimous settlement on GST compensation to the states for 5 years,” he talked about.
Mitra additionally mentioned the whole lockdown adopted by partial restrictions over the last three years has severely undermined the premise of the choice of the empowered committee taken in 2016.”I hope you’ll agree that it might be most rational to proceed to supply GST compensation to the states for the following 3 to five years past June 2022 to supply much-needed aid to the state funds,” he mentioned within the letter.
The former West Bengal finance minister additionally mentioned the unexpected battle in opposition to the pandemic has put the fiscal well being of the states underneath big stress.“…the impact of the pandemic continues to adversely affect our economy. The supply chain in manufacturing, services and agriculture is still broken. The MSME sector is struggling to survive and the informal/unorganised sector, which provides unemployed employment to more than 90 per cent of the labour force, remains severely fractured,” Mitra acknowledged. On high of that, the huge inflationary pressures have “severely aggravated and impaired the economics of states, he mentioned. The GDP has not but reached the pre-pandemic ranges and isn’t more likely to attain a fascinating trajectory anytime quickly, Mitra added.
Source: www.financialexpress.com”