If the central government is not held accountable for the Goods and Services Tax (GST) deficit, states may be forced to borrow at a higher rate. According to estimates, states may have to bear tax losses of around Rs 4 lakh crore due to the corona crisis. In the opinion of experts, the central government should come forward to help the states by finding alternative ways.
Former Economic Affairs Secretary Subhash Chandra Garg told Hindustan that the central government was not obliged to compensate the states for the losses incurred during the epidemic. In such a scenario, the GST Council should raise taxes on certain items and fill the gaps in the states. The GST Act provides that any loss can be compensated by increasing the duty. Although the states have the option to take the orrow, it will not be in their interest. He further suggested that the central government or the GST Council should take the responsibility of meeting the economic needs of the states.
Economic affairs expert Pranab Sen said the economic burden on the states was increasing in the era of the Corona crisis. He said states need to bear the cost of treating people as well as providing them with employment. In such a situation, they will need more financial support in the coming days. It is estimated that the Corona epidemic will cause a loss of about Rs 4 lakh crore to the states this year.
Pranab Sen further said that the centers have given the states the option to take over. However, if the states take the loan, they will get more expensive loans than the central government. At the same time, states have to bear the loss of debt for a long time. In such a situation their condition will be worse. He suggested that the central government should find an alternative way to finance the states and the finance minister should find a way to provide funding to the states.