With the states requiring funds to meet their expenditure at the onset of the second half of the financial year, pending compensation dues to the tune of over Rs 2 lakh crore are expected to be the contentious issue in the discussions with the Centre in the upcoming 42nd Goods and Services Tax (GST) Council meeting slated for Monday.
In the current fiscal, the states are staring at a staggering Rs 2.35 lakh crore Goods and Services Tax (GST) revenue shortfall.
Of this, as per Centre’s calculation, about Rs, 97,000 crore is on account of GST implementation and rest Rs 1.38 lakh crore is the impact of Covid-19 on states’ revenues.
The states and union territories which have intimated their decision to the Centre are Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Goa, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir, Karnataka, Madhya Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Odisha, Puducherry, Sikkim, Tripura, Uttarakhand and Uttar Pradesh.
Ten Opposition-ruled States, including Kerala, are yet to agree to the proposals which envision States raising ₹97,000 crores via a special borrowing window to be created by the central bank, or borrowing the entire ₹2.35 lakh crore shortfall in compensation cess collections from the market.
Finance minister Nirmala Sitharaman will chair the 42nd GST Council meeting via video conferencing from 11 am.
The meeting will be attended by MOS Anurag Thakur besides Finance Ministers of States and UTs and Senior officers from the Union Government and States,” the Ministry of Finance wrote on Twitter.
