GST Reform, Compensation and States' Fiscal Autonomy: Punjab Finance Minister's Stand
Punjab Finance Minister Harpal Singh Cheema emphasizes on adequate compensations for states under GST reforms. He stresses that GST rate rationalization should not compromise states' fiscal autonomy and suggests that revenue protection should reach disadvantaged populations instead of corporations. A robust framework is needed to avoid financial instability in states.
- Country:
- India
Punjab Finance Minister Harpal Singh Cheema has called on the Centre to ensure adequate compensations for states amid current proposals to rationalize GST rates. Speaking at a meeting alongside finance ministers and representatives from several states, Cheema urged for a balanced approach to sustain the fiscal autonomy of states.
Cheema emphasized that the benefits of GST reform should prioritize poorer populations grappling with inflation over corporate interests. He warned that proceeding without compensatory measures could induce severe financial instability and undermine the federal structure, an outcome states deem unacceptable.
Following the GST rollout in July 2017, states have faced significant revenue losses, with Punjab alone bearing a loss of approximately Rs 1.11 lakh crore. Cheema supports an additional levy on sin and luxury goods, suggesting such proceeds be wholly transferred to states to mitigate fiscal stress and uphold their constitutional duties in social welfare.
(With inputs from agencies.)
Google News