Chidambaram Appeals Centre to Extend GST Compensation
The former Union Finance Minister and present Congress leader, P Chidambaram has appealed to the Central Government to extend the GST compensation period for another 3 years. He stated that the compensation period needs to be extended considering the disastrous condition of the financial health of all the states.
The Congress party has stated that the financial condition of the states is not at its best. Hence, the Centre needs to extend the GST compensation period for at least three more years. The former Union Finance Minister of India, and presently the leader of the economy panel of the Congress Chintan shivir, P Chidambaram addressed to the media for a reset of economic policies practiced in the states at the shivir held in Udaipur. He also pitched for a shuffle in the policies to make significant progress in liberalization and to mitigate the issues of inequalities and extreme poverty that prevail in the society.
The five-year period of GST compensation that was being granted by the Central Government to all the states will end in June, 2022. The compensation was being provided by the Centre for compensating the states suffering from loss of tax revenue after the GST framework was brought into effect in the country.
Chidambaram demands for an extension of this period for at least three more years as the states have still not reverted to a healthy economic condition. He described the present economic condition of the states as a matter of serious concern that needs immediate attention. Chidambaram said that inflation of the country has increased to an unimaginable limit and it requires to be checked immediately. The rate of WPI is at 14.55 per cent and the CPI is at 7.9 per cent. The government has imposed high rate of taxes on petrol and diesel as well as high rate of GST taxes. The rate of unemployment has reached to the lowest level of 7.83 per cent and the rate of job participation is also extremely low at 40.38 per cent.
The former minister has rejected the Russia-Ukraine war to be the cause of the current inflation and has stated it to be a lame excuse for demanding an extension of the GST compensation period. The minister said that the rate of inflation in the country was quite before the war between Russia and Ukraine took place. The war has only added to the already prevalent problem.
P Chidambaram has put the blame of inflation upon the Reserve Bank of India (RBI). The former minister has been an active key player in the economic liberalization in 1991. He, along with Manmohan Singh and PV Narsimha Rao, has pushed for a policy reset in the country’s economy. This could be an integral part of the economic vision of the Congress Party for the 2024 elections.
According to the statement of the former minister, P Chidambaram, the Congress ushered in new liberalization for the last thirty years. The party now believes that it is high time for recalibration of economic policies and a comprehensive review of the Centre-state fiscal is very much necessary. For addressing the social challenges like inequalities and poverty, a reset in the economic policies is urgently needed.