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'Why is your CM 'mortgaging' your future for PM Modi'

New Delhi: Taking a jibe at the state governments that have agreed to the Centre's borrowing proposal on the GST compensation issue, Congress leader Rahul Gandhi on Monday asked people as to why their chief ministers were "mortgaging" their future for Prime Minister Narendra Modi.

In a tweet, Gandhi said, "1. Centre promises GST revenue for states. 2. Economy shattered by PM & Covid. 3. PM gives (Rs) 1.4 lakh Crs tax cuts to Corporates, buys 2 planes for himself for (Rs) 8400 Crs. 4. Centre has no money to pay States 5. FM tells States- Borrow."

"Why is your CM mortgaging your future for Modi?" Gandhi asked.

In August, the Centre gave two options to the states to borrow either Rs 97,000 crore from a special window facilitated by the Reserve Bank of India or Rs 2.35 lakh crore from the market.

It had also proposed extending the compensation cess levied on luxury, demerit and sin goods beyond 2022 to repay the borrowing. Following demand by some states, the amount of Rs 97,000 crore was increased to Rs 1.10 lakh crore.

As many as 21 states –which are mostly BJP-ruled or have supported it on various issues –have opted to borrow Rs 1.10 lakh crore to meet the compensation shortfall. The Centre has released Rs 20,000 crore to the states towards the compensation shortfall so far in the current fiscal.

Under the GST structure, taxes are levied under 5, 12, 18 and 28 per cent slabs.

Terming the announcements of Finance Minister Nirmala Sitharaman as 'a drop in the ocean', Congress spokesperson Gourav Vallabh said, "The government should take steps to formulate a solid economic policy, rationalise GST and pay money directly in the hands of consumers so that the country can get out of the severe recession."

Just a two three months, the SBI has considered India's growth rate for the financial year 2020-2021 at -6.8 per cent, which has been reduced by the government to -10.9 per cent, he said.

Raising questions over economic policies of the government, Vallabh said, "Now government employees would take an advance of Rs 10,000 and the Rs 10,000 would be deducted per month from their salary. Then how will they buy consumer goods from it."

Earlier in the day, Union Finance Minister Nirmala Sitharaman announced that the government would give Rs 12,000 crore in special interest-free 50-year loans to states for capital projects as part of the plan to boost economic activities.

Sitharaman said that an estimate based on measures announced on Monday showed that it will boost demand by Rs 73,000 crores, to be spent by March 31, 2021.

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