Covid-19 battle: Cash-strapped states send SOS to centre

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New Delhi: States have urgently petitioned the Centre seeking compensation for a slump in goods and services tax (GST) collections as well as the flexibility to borrow more from the markets as they seek to cope with the Covid-19 outbreak.

Punjab has sought the release of ₹6,000 crore toward GST compensation and immediate release of about ₹2,000 crore pending GST arrears. Rajasthan said the central government owes it ₹11,000 crore until February.

Bihar deputy chief minister Sushil Modi, however, said that some states were playing politics on the issue of dues.

“It is not that the Centre has money and is not giving it,” Modi said, adding that GST revenues have been sluggish due to the economic slowdown.

He said Bihar had announced an additional one month’s salary for frontline workers and will not cut pay. Modi said Bihar has also suggested legal changes to the framework governing funds such as the district mineral fund to allow the state to use it to provide assistance to non-registered workers.

“We can’t print money… we can only borrow,” said Punjab FM Manpreet Badal, adding that every state is in the same boat. Some states have deferred salaries while cutting other spending.

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