The States have requested that the Union government be “liberal” towards them given the impacts of demonetization and the ensuing anticipated drop in incomes. They have additionally referred to the unwinding in getting limits recommended by the Fiscal Responsibility and Budget Management (FRBM) Act.
At a meeting of the Goods and Services Tax (GST) Council that closed on without a concurrence on issues, for example, double control, the Finance Ministers of the States, particularly those ruled by Opposition gatherings, were obvious that the aftermath of demonetization would not be tolerated by them.
An authorized person from the opposing party said that “After discussions on the GST, officials left the room and it was just us [State Finance Ministers] and Union Finance Minister Arun Jaitley who were left in the room. He briefed us on the progress of demonetization and issues related to that. We were quite clear that we expected generosity from him.”
“After discussions on the GST, officials left the room and it was just us [State Finance Ministers] and Union Finance Minister Arun Jaitley who were left in the room. He briefed us on the progress of demonetization and issues related to that. We were quite clear that we expected generosity from him, The States are going to see their revenues drop because of demonetization, whereas the Government of India is likely to get a dividend from the Reserve Bank of India (RBI) to the extent of the unaccounted-for money being written off and outside the Consolidated Fund of India.”
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“That money should be shared with the States to overcome revenue shortages and meet the budgetary commitments and promises made by us to the people. This loss of revenue is not due to any act by us or by God, but stems from a decision made by the Union government,” he added
Mr. Jaitley showed up wary despite this request, yet taking a gander at the way that the GST Council neglected to go to a determination on a hostile issue, maybe part of a share of some silver linings of the demonetization move may not be out of order.