Gehlot urges Modi to extend GST compensation period

Rajasthan Chief Minister Ashok Gehlot has written a letter to Prime Minister Narendra Modi, demanding calculation of GST compensation on the basis of the gross revenue deficit of the state and extending the period of the compensation. He has also requested to raise the additional borrowing limit of the states for the next financial year in the wake of the coronavirus pandemic.

Ahead of Union Budget, Gehlot urged Modi to give attention towards the economic situation of the state, adding that the pandemic has had a profound negative impact on the economy. The chief minister said after the removal of various restrictions, including the nationwide lockdown, economic activities have started now, but it will take a long time for the situation to return to normal.

Gehlot said payment for GST compensation is payable by the Centre to the states till June 2022. But in the current economic circumstances, Gehlot said this period should be extended by five years. He has also reiterated the earlier demand to assess and pay GST compensation amount on the basis of gross revenue deficit for the current financial year.

Gehlot has stated in the letter that under the circumstances arising out of the virus, the state government has opted to borrow an additional two per cent of the gross state domestic product (GSDP) for the current financial year. He urged Modi to continue this provision of two percent additional borrowing for financial year 2021-22 to ensure availability of financial resources for liabilities of the state government.

Gehlot said the goals of GDP could not be achieved due to the weak pace of development due to the pandemic. Also, the revenue collection in the state will also not reach the expected level. So, it is necessary to take the above positive steps to improve the economy in the upcoming general budget, he added.