Cut In GST Compensation: Why Jagan Remains Silent?

With the Union government reneging on its promise to pay states the compensation of which it vowed while rolling out the GST, almost all the states have been criticising the Modi-led NDA at the Centre.

GST, billed as the biggest tax reform in India since Independence, was rolled out in July 2017, and it included nearly all indirect taxes collected by states and the Union. To persuade states to move to the “one nation-one tax” approach, the Centre promised to cover the shortfall in their tax revenues for five years through a new GST compensation cess.

As per the rules, the Union government has to pay Rs 3 lakh crore as GST compensation to the states but it says it will compensate only Rs 1.65 lakh crore which is leading to resentment in the states. It is just three years after rolling out GST and the Modi government is washing off it hands from paying the compensation.

Delhi, West Bengal, Kerala, Chattisgarh, Tamil Nadu and Telangana are insisting that the Centre pay the compensation as per the 14 per cent growth rate, mentioned in the rule.

When the AIADMK government, an ally of the NDA, is itself asking the Centre to pay the compensation, Chief Ministers of Kerala and Bengal, who are anti-BJP, have also united in their fight against the Centre.

TS finance minister Harish Rao faulted the Centre for trying to escape payment of Rs 1.35 lakh crore in the name of Act of God and Corona. TS Chief Minister K. Chandrasekhar Rao had even written a letter to PM Modi stating that the Union government was violating the GST Act. The Telangana government declared that they would fight against the violation and even move the court if necessary.

However, amid all the ruckus, AP Chief Minister Y.S. Jagan Mohan Reddy and finance minister Buggana Rajendranath Reddy are maintaining a stoic silence on the issue which is being faulted by neighbouring states.

Earlier, Jagan had announced that the YCP government would extend issue-based support to the Modi government. However, the BJP leaders are not leaving even the slightest opportunity to target the YCP government yet the YCP government is trying to maintain cordial relations with the BJP at the Centre.

Meanwhile, there is criticism against the YCP government that it is adopting double standards with regard to some issues like the Citizenship Amendment Act (CAA). In the Parliament, the YCP MPs supported the CAA Bill even while the Jagan Mohan Reddy government adopted a resolution against the same bill in the Assembly.

Jagan did not make any comments on the Union government’s Electricity Act but the Telangana government opposed it.

In AP, the opposition parties are mounting pressure on the Jagan Mohan Reddy’s government that he demand for the GST compensation as the state, which is already reeling under debts, has been worst hit due to the Corona crisis and the GST funds could be used for any purpose.

There is criticism against the YCP leaders that they are anyway being silent even when the Centre had denied special category status (SCS) to AP and many other provisions mentioned in the AP Reorganisation Act. There are questions being raised as to what is stopping the YCP government from raising its voice against the Centre with regard to GST compensation, which is due to be paid as per the law. People are wondering why Jagan Mohan Reddy is fearing Modi.

In the wake of the criticism and doubts, there is anxiety among the people about how Jagan would react to the non-payment of GST compensation.