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    Even Congress-ruled states claim compensation for CST cut

    Synopsis

    Delhi, which has been administered by the Congress since 1998, has raised a compensation package of 993 crore for the same period.

    NEW DELHI: The state governments that have claimed a financial package from the Centre for loss in their revenues because of the reduction of CST rates from 4% to 2% is a motley crowd, comprising both states ruled by the Congress and its alliance partners, as also their political adversaries.

    With the Union government claiming that it had already made the "final settlement'' for the year 2010-11 after releasing an amount of 6,393.94 crore as compensation package to the states to recompense them for their revenue-deficit owing to the reduction in CST rates, the states are now crying foul. And it is not just the Opposition-ruled states which are feeling the pinch. Among the states which have raised a hefty compensation package for the year 2010-11 are also those administered by the Congress and its coalition partners.

    Heading the list is Tamil Nadu, which has claimed compensation to the tune of 2,250 crore. It was ruled by a DMK-led alliance till May 15 last year. Haryana, a state which has been governed by the Congress since March 2005, has claimed a sum of 1,488 crore for the depletion in its revenues during the period 2010-11 because of the reduction in CST rates. And Andhra Pradesh, another Congress-ruled state, has demanded 1,314 crore as compensation package for the year 2010-11.

    Delhi, which has been administered by the Congress without any break since 1998, has raised a compensation package of 993 crore for the same period. Assam, which too has seen a Congress rule for the last two terms, has staked claim to a financial package of 235.36 crore.

    Rajasthan, which has had a Congress government since December 2008, has drafted a compensation package worth 582 crore to enable it to plug the revenue-deficit because of the decrease in CST rates from 4% to 2%.

    West Bengal, a state which came under the Trinamool Congress-Congress alliance rule in May last year after the ouster of the Left Front government, has prepared a financial package that runs into 638 crore to enable it to make up for the loss in its revenue because of the drop in CST rate.

    Uttar Pradesh, presently in the middle of Assembly polls, has raised a compensation package of 1,801 crore for the period 2010-11. The state has been under a spell of BSP rule for the last five years.

    These states have now approached the Empowered Committee of State Finance Ministers to take up their grievances with the Centre. "It'd be very difficult for the states to agree to a GST roll-out anytime soon until they are compensated by the Centre for the losses suffered by them in terms of revenue collection because of reduction in CST rates from 4% to 2%. The states, taken together, stand to lose as much as 19,000 crore every year because of the decrease in CST rates,'' said a senior member of the state finance ministers' panel.

    The states want the Centre to compensate them not just for the year 2010-11, but also for 2011-12. The Centre has refused to pay a single penny as compensation for the year 2011-12.
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