States flag notecull concerns ahead of GST meet
NEWDELHI: Demonetisation is on everyone’s mind these days. Before the beginning of an informal meeting with finance minister Arun Jaitley on the Goods and Services Tax (GST), state finance ministers expressed concerns over the impact of demonetisation in their respective states.
West Bengal finance minister Amit Mitra said the ban on old currency notes would trigger recession as industrial activity would be hurt and tax collection would recede, sources said.
Tamil Nadu, too, joined the chorus, saying that industrial activity was suffering, while Uttar Pradesh said factories in Kanpur and Moradabad have closed operations.
Kerala finance minister Thomas Isaac said many states have “reported informally” that they have seen a “significant decline in revenues”. “If 86% of your money disappears, there is a problem for the people. There is a collateral impact on investment sentiments.”
Around ₹14 lakh crore, or 86%, of India’s currency has been withdrawn and is getting replaced with new ₹500 and ₹2,000 notes.
All states were in agreement that their revenues will get impacted and employment will be hit, though nobody demanded a roll back, said the sources quoted above.
Meanwhile, the informal meeting of the GST Council ended inconclusively on Sunday. The council had met to decide who will tax whom under the new GST regime between the Centre and states. “Today’s meeting remained incomplete. Discussions will continue on November 25,” finance minister Arun Jaitley said.