Lower GST rates will bleed state finances: Bengal, Kerala

KOLKATA/T'PURAM: Bengal and Kerala welcomed lower GST rates for easing costs to households but warned that states will shoulder crippling losses in revenue, accusing Centre of passing the burden while taking credit.

Bengal CM Mamata Banerjee said Monday her state would forfeit Rs 20,000 crore because of the decision, though she backed it for the sake of consumers. "How will I run the state in such a condition?" she asked after inaugurating a Durga Puja in Kolkata. "No compensation was given to states on account of lowered GST rates, the money was simply cut from our GST share."


"I will place the truth before the people, take out ads to make sure they know the loss we suffered. This is no credit to central govt," she said. Banerjee reminded that she was the first to demand insurance be exempt from GST and pointed to anomalies: "Many life-saving medicines and small items had GST. There was GST on jeere (cumin) but not on heere (diamond)." Banerjee demanded whether Delhi would return funds withheld for 100 days' work, Awas Yojana, roads, Jal Swapno and Sarva Shiksha Abhiyan.
Trinamool national general secretary Abhishek Banerjee sharpened the attack. "PM Modi yesterday said 'GST Bachat Utsav'. Was it 'GST Loot Utsav' since 2017?" he asked.

In Kerala, finance minister KN Balagopal warned of a "substantial fall" in revenues. He estimated Kerala's potential loss at between Rs 50,000 crore and Rs 2 lakh crore, directly affecting social security pensions, salaries and development projects. "States have no alternative avenues to raise such revenue. With 41% of overall state income coming from GST, the impact will be severe if this loss materialises," he said, accusing Delhi of pushing reforms without appropriate study. Balagopal cautioned that companies might not pass on the benefit. "Even Union ministers admitted this concern," he said.

(Inputs from agencies)