Telangana Chief Minister K Chandrasekhar Rao on Tuesday urged Prime Minister Narendra Modi to drop the proposal asking the states to go for borrowingto meet theshortfall in the GST compensation and said the Centre can itself take up the entire financing.
In a letter to Modi, he also claimed the Centre has taken a unilateral decision to lower the threshold limit of 14 per cent for working out GST compensation to ten per cent, terming it as a matter of grave concern.
He underlined the need for strengthening cooperative federalism in this crisis situation posed by the COVID-19 pandemic.
The Centre was abdicating its responsibility of fully compensating states by taking recourse to legal opinion, and violated the provisions of the GST Compensation Act by parking the surpluses in the Compensation Fund in its Consolidated Fund instead of parking them in the non-lapsable Compensation Fund in the Public Account, he said.
Taking into account the compelling reasons mentioned above, it is my earnest request that the decision of asking the states to meet the shortfall in the compensation through borrowings may be reversed, Rao said.