Cong Cre­ated States-Cen­tre Trust Deficit: Sushil Modi

FM Jait­ley spoke to ev­ery CM per­son­ally while Chi­dambaram was both­ered about only states ruled by Congress

The Economic Times - - Pure Politics - Va­sudha.Venu­gopal @times­

New Delhi: Bi­har deputy CM Sushil Modi lashed out at the Congress for ‘play­ing pol­i­tics’ on GST, say­ing that the UPA was the rea­son for the trust deficit states had with the Cen­tre while im­ple­ment­ing eco­nomic re­forms be­cause the party had never paid to the de­mands of the states seek­ing com­pen­sa­tion for phas­ing out cen­tral sales tax (CST) . The Bi­har deputy CM’s re­marks come at a time when the GST im­ple­men­ta­tion — which started on July 1— is fac­ing crit­i­cism by the opposition. Congress VP Rahul Gandhi on Mon­day said that GST was a “tor­pedo” which de­stroyed the econ­omy.

“Un­der the UPA, the states were only seek­ing fair com­pen­sa­tion for cen­tral­salestax­phase-out­in2012but Chi­dambaram didn’t give a sin­gle penny to them. The losses went over ₹ 2,000 crore but he did noth­ing to re­sol­vetheis­sue.Hekept­si­len­tand didn’t even let the em­pow­ered­com­mit­tee func­tion prop­erly,” Modi said. T h e U PA gov­ern­ment had de­cided that CST would be phased out be­gin­ning April 2007 over a pe­riod of three years. The CST rate was ac­cord­ingly re­duced from 4% to 3% with ef­fect from April 1, 2007. Guide­lines for com­pen­sa­tion were framed in 2007 and re­vised in 2008. As chair­man of the Em­pow­ered Com­mit­tee of States, Sushil Modi had writ­ten to PM Man­mo­han Singh warn­ing him the de­ci­sion of the gov­ern­ment re­gard­ing CST com­pen­sa­tion­willaf­fect­the­p­ro­cess of tax re­forms. For­mer FM P Chi­dambaram had re­cently flayed the gov­ern­ment for the hasty im­ple­men­ta­tion of the GST which he said was a good idea that should have been im­ple­mented with due care and at­ten­tion. Sushil Modi said FM Arun Jait­ley on the other hand had spo­ken to ev­eryCMper­son­al­ly­forGST.“The con­gress­wa­son­ly­con­cerned­about the States it was rul­ing. The losses made­by­man­u­fac­tur­ingS­tates­such as Tamil Nadu, Gu­jarat went un­ad­dressed.” He said the Naren­dra Modi gov­ern­ment on the other hand was try­ing its best to re­solve is­sues with re­spect to GST by “tack­ling the is­sue heads on, iden­ti­fy­ing all the places that the shoe pinches, and mak­ing nec­es­sary amend­ments.”

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