GST compensation row: State govts ask Centre to borrow and pay

The finance ministry on Saturday officially communicated the finer details of the two options to states to make up for the compensation shortfall by way of borrowings

Terming the two options proposed by the Union government as “unconstitutional,” “illegal” and “a betrayal of the spirit of cooperative federalism,” key opposition-ruled states pressed the Centre to borrow in order to compensate states for the entire goods and services tax (GST) shortfall ‘regardless of Act of God’.

While six states – Kerala, Telangana, Chhattisgarh, Delhi, Punjab and West Bengal – huddled over a video-conference meeting on Monday to thrash out a strategy to take on the Union government, some states separately shot off letters to the Centre, expressing disapproval of putting the onus of borrowings on states.

Tamil Nadu