Former Finance Minister P Chidambaram hit out at Nirmala Sitharaman over “act of God” remark (File)
New Delhi:
Congress leader P Chidambaram has taken a swipe at Finance Minister Nirmala Sitharaman over the “act of God” comment she made on Thursday while describing the coronavirus pandemic and its impact on GST collection.
Sarcastically hailing the Finance Minister as “the messenger of God”, Mr Chidambaram demanded she also explain the government’s “mismanagement” of the economy before the Covid crisis began.
“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?” Mr Chidambaram asked in the first of five tweets posted Saturday morning.
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
Mr Chidambaram, and other senior Congress leaders, have pointed to a steady decline in quarterly GDP growth rates – from 7.1 per cent in Q2 2018/19 to 3.1 per cent in Q4 in 2019/20.
He also labelled both options given by the Narendra Modi government to counter the shortfall in GST (goods and services tax) collection as “unacceptable”.
“Under the first option states are asked to borrow by pledging future receivables under compensation cess. The financial burden falls entirely on the states,” he tweeted.
“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,” he added.
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,” Mr Chidambaram declared.
Two days ago Nirmala Sitharaman said the pandemic had affected GST collection – a shortfall of Rs 2.35 lakh crore for fiscal year 2021.
“… this year we are facing an extraordinary situation. We are facing an act of God where we may even see a contraction,” she said.
The centre has released over Rs 1.65 lakh crore as GST compensation to states for fiscal 2020, including Rs 13,806 crore for March, the Finance Minister said, noting that cess collected for GST compensation was only Rs 95,444 crore.
The meeting of the GST Council was held amid severe pressure from states seeking compensation for revenue shortfall amid the coronavirus pandemic.
The centre is hard-pressed to pay GST dues to states that have not earned much this year due to months of lockdown necessitated by the COVID-19 crisis. Punjab, for example, said it may see a revenue deficit of Rs 25,000 crore this year.
Congress-ruled states (which includes Punjab) and those run by parties other than the BJP have said the centre has a statutory obligation to pay GST dues. The centre claimed it has no such obligation if there is a shortfall in collections.
However, the government’s top lawyer, Attorney General KK Venugopal, has also said the centre has to compensate states fully for the loss of revenue in GST during the coronavirus crisis, according to sources.
Yesterday Congress MP Rahul Gandhi also hit out at Nirmala Sitharaman over her “act of God” remark, and said the economy had been “destroyed” by three actions – demonetisation, “flawed” GST and a “failed” lockdown.
With input from PTI
