Former Union ministers P. Chidambaram and Jairam Ramesh on Friday said that the Centre’s proposal to State governments to go for borrowing to bridge the compensation gap is an “abdication” of their responsibility and States should not accept such a proposal.
Citing the COVID-19 situation and the loss of revenue, the Centre had expressed its inability to compensate the State governments for the shortfall in revenue.
“Parliament passed a law that Centre will compensate states for GST shortfalls for 5 years. Centre is now passing the buck to states telling them they should borrow to make up shortfalls. This is abdicating Centre’s legal obligations. Pathetic! States should oppose tooth and nail,” Mr. Ramesh said on Twitter.
In a series of tweets, Mr. Chidambaram accused the Narendra Modi government of trying to cripple the States by resorting to such tactics. In their opinion, the Central government was passing the buck of financial burden to the States. Under the law, the obligation to compensate the States falls solely on the Central government. The latest assault on the States is part of an elaborate design of the Modi government to financially cripple the States and reduce them to begging for money from the Centre, Mr. Chidambaram said.
“States must reject both options and demand, in one voice, that Centre must find the resources and provide the money to the States,” he added.
