‘If coronavirus pandemic was Act of God, why was the economy doing poorly earlier?’ asks Chidambaram
The Congress leader also said the two options the Centre had given to counter the shortfall in GST collection were unacceptable.
Congress leader P Chidambaram on Saturday attacked Union Minister of Finance Nirmala Sitharaman for describing the coronavirus pandemic as an “Act of God”, wondering why India’s economy was doing poorly before the pandemic struck this year.
“If the pandemic is an ‘Act of God’, how do we describe the mismanagement of the economy during 2017-18 2018-19 and 2019-20 BEFORE the pandemic struck India?” Chidambaram asked. “Will the FM as the Messenger of God please answer?”
Gross Domestic Product growth rate has declined from 7.1% in the second quarter of 2018-’19 to 3.1% in the fourth quarter of 2019-’20, a point the Congress has used to attack the Bharatiya Janata Party-led government.
If the pandemic is an ‘Act of God’, how do we describe the mismanagement of the economy during 2017-18 2018-19 and 2019-20 BEFORE the pandemic struck India? Will the FM as the Messenger of God please answer?
— P. Chidambaram (@PChidambaram_IN) August 29, 2020
The coronavirus pandemic severely hit Goods and Services Tax collection, creating a deficit of Rs 2.35 lakh crore for the 2020-’21 fiscal year, the Ministry of Finance had said on Thursday.
Sitharaman chaired the 41st meeting of the Goods and Services Tax Council to deliberate on the revenue shortfall being faced by states amid the coronavirus crisis. Sitharaman referred to the coronavirus crisis as an “Act of God” that led to the contraction of India’s economy and led to the shortfall in GST collection.
The Centre had released over Rs 1.65 lakh crore as Goods and Services Tax compensation to states for the 2019-’20 financial year, including Rs 13,806 crore for March. Sitharaman had said that the cess collected for GST compensation was only Rs 95,444 crore.
Chidambaram also said that the options the Centre had given to counter the shortfall in Goods and Services Tax collection were unacceptable. “Under the first option the States are asked to borrow by pledging their future receivables under Compensation cess,” he tweeted. “The financial burden falls entirely on the states. Under the second option, States are asked to borrow from the RBI [Reserve Bank of India] window. It is more market borrowing, only by a different name. Again, the entire financial burden falls on the states.” Chidambaram accused the Narendra Modi-led government of absolving itself of all responsibility, which he called a “betrayal as well as a direct violation of law”.
Under the second option, States are asked to borrow from the RBI window. It is more market borrowing, only by a different name. Again, the entire financial burden falls on the States
— P. Chidambaram (@PChidambaram_IN) August 29, 2020
The central government is absolving itself of any financial responsibility. This is a gross betrayal as well as a direct violation of the law
— P. Chidambaram (@PChidambaram_IN) August 29, 2020
On Friday, Chidambaram had said that the states should reject both options presented by the Centre, and demand money together, PTI reported. “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 beg for money from the Centre,” Chidambaram claimed.
Attorney General of India KK Venugopal had earlier this week told the Centre that it has to pay full GST compensation to the states even if there is a shortfall in revenue.
Meanwhile, Congress leader Rahul Gandhi once again claimed on Friday that the Narendra Modi-led government had destroyed the Indian economy. “India’s economy has been destroyed by three actions: 1. Demonetisation 2. Flawed GST 3. Failed lockdown. Anything else is a lie,” Gandhi tweeted.
