Maharashtra govt is playing the GST card to hide its inefficiency - The Daily Guardian
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Maharashtra govt is playing the GST card to hide its inefficiency

Vishwas Pathak



The issue of the GST has always been at the forefront of political allegations when it comes to accusing the Central government of not providing enough assistance needed by the state governments. Claiming that the payment of the GST is a legal responsibility of the Centre, the deputy chief minister of Maharashtra, Ajit Pawar, said that the Union government should take a loan and pay the compensation to the state governments. Even in the GST Council meeting, Pawar continued the consistent pattern of complaining about not getting enough financial aid from the Central government amidst the financial crisis owing to the lockdown.

However, all these inefficient voices of the MVA government became tight-lipped when data exhibiting the direct and indirect assistance from the Central government to the Maharashtra government was released in the interim. When the MVA government failed in creating a public perception on the above mentioned baseless allegations, they directed their entire force in blaming the Central government on the issue of GST compensation. However, before making some irresponsible accusations, it is indispensable for everyone to understand the basis of the GST compensation and its provisions in regards to the payment of the same to state governments while understanding the role of the Central government.

With the intent of keeping a single tax system and reducing tax burden in the country, the then Atal Bihari Vajpayee-led government had come up with the concept of GST. The then Union government had appointed a committee under the chairmanship of the economist, Dr Vijay Kelkar. This committee recommended GST in 2005 with a view of having a single tax system across the country. The Manmohan Singh-led UPA government announced that the GST will be introduced by April 2010. However, a common consensus could not be achieved among the state governments on the issue of compensation to be given to the states in case a financial loss was incurred in the process of tax collection. However, it was Modi government’s decisiveness and inclusivity which encouraged all the state governments to come to a consensus and introduce the GST in an absolute union. The positive consequence of this is that the tax rate on various goods and services came down from an average of 24% to 17%.

All the staunch critics accusing the Union government must understand that the Centre cannot unilaterally take any decisions regarding these issues. It has to be taken into consideration with all stakeholders in the GST Council, which has been constituted for these purposes. The finance ministers of all the states act as members of the council. The GST Council has the power to recommend laws, regulations and tax rates on the goods and services tax. A decision can only be made if any proposal has the support of at least two-thirds of the members.

Now, let’ analyse the issue of compensations: If a state is receiving Rs 1 lakh crore and Rs 90,000 crore from GST, then according to the GST (Compensations to States) 2017 Act, the Central government is obligated to give Rs 10,000 crore to the state government. This compensation is paid through cess received from inter-state transactions. This compensation has been paid by the Centre for two and a half years since the enactment of the Act without any friction. However, since the end of March 2020, the entire economic cycle of the country has been running on a crisis mode, owing to the lockdown which was announced due to Covid-19.

There has also been a steep decline in the revenue collection at the level of the central government for the last 4-5 months. Referring to the GST Act, the central government could have easily said that giving compensation will not be possible. However, the central government instead of keeping its hands off the trouble has, in fact, taken a holistic view and assured assistance to the state governments.

 As on date, the Central government is obligated to give a total of Rs 3 lakh crore to various state governments, out of which Rs 65,000 crore will be collected through cess. The question is of the remaining Rs 2,35,000 crore. Here, the Central government has given two options to the state governments by which they can get the balance compensation.

As per the projected calculations, the amount payable through the cess collections was Rs 97,000 crore. However, it has now come to Rs 2 lakh 35 thousand crore. According to the first option, the Central government has proposed to arrange the balance compensation amount through an RBI loan, where the principal and interest will be given by the centre and the repayment will start after five years. In addition, this borrowing shall not reflect in the balance sheet of the states.

According to the second option, the Central government will pay the principal of Rs 2 lakh 35 thousand crore from the open market, but the states will have to pay the interest and this will have to be mentioned in the state’s balance sheet. For this, the Centre has also increased the borrowing limit of the states by 0.5%.

Both of these options are pragmatically based. However, the MVA government has disapproved of all of the above assistance. The state government incomprehensively demands that everything must be given by the Centre. In the current times of crisis, the Maharashtra government must act on the basic foundations of the federal structure and explore the options for them along with the helping hand extended by the central government instead of asserting the entire pressure and the financial burden on the central government.

At the end of March 2020, the Centre received Rs 95,000 crore through cess. However, the Centre has given a return of Rs 1 lakh 65 thousand crore. From this amount, the Centre has given the highest return of Rs 19,200 crore to Maharashtra. With these facts and figures, the supercilious righteousness of the Maharashtra state government stands nothing but absolutely exposed.

Given the situation with the Chinese at the border for the past few months, the central government also had to increase defence expenditure. Despite the Central government’s financial difficulties, the Centre is regularly providing free food, grains and gas cylinders to the poor and needy during the lockdown. Assistance amounts from the Pradhan Mantri Kisan and Jan-Dhan schemes are being deposited directly into bank accounts, and an additional Rs 1,000 is being disbursed directly to the bank accounts of the elderly, widows and the disabled. The central government has not transferred the responsibility of managing the funds required for the implementation of these schemes to anyone or has not suspended the implementation of the schemes as well.

Such an extraordinary situation is an exception. In such times, states should also shoulder their responsibilities. The state’s 2020-21 budget is Rs 4 lakh 30 thousand crore, while the share of the GST is about Rs 50,000 crore. Given the size of the state budget, the share of the amount is not very large. Apart from the amount due by the Central government, the government should first state its expenditure planning about the remaining Rs 3 lakh 80 thousand crore. Without doing so, the alliance government has started brainstorming on the amount that has to come from the centre. On one hand, the MVA government explicitly claims the Central government as the head of the family, and on the other hand, it is shying away from the self-responsibilities as a family member. These things only expose their hypocrisy.

 The fact of the matter is that the MVA government, unlike other state governments, has not helped the people of Maharashtra in any way. Instead, it has only created chaos by its way of handling the situation. States like Karnataka, Madhya Pradesh, Uttar Pradesh and Telangana have declared various packages for the benefit of their citizens. However, the Maharashtra government has only moved away from taking responsibilities, and to hide the same, they are playing the GST compensation card.

The writer is media in-charge, BJP Maharashtra. The views expressed are personal.

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Three days before the US-Russia summit, Russian President Vladimir Putin on Sunday said that the two countries need to engage in a constructive dialogue and establish mechanisms for interaction as there are areas in which Moscow and Washington can cooperate.

“[We need] to restore our personal contacts, relations, establish a direct dialogue, create really functioning mechanisms of interaction,” Putin said in an interview broadcast by the media outlet. The President noted that the US side is well aware that there are a number of areas that are of mutual interest, such as strategic stability, regional conflicts, environmental protection measures, and climate. “There are areas in which we can really work effectively,” Putin added.

In the process, President Putin said that Russia would be ready to hand over cyber criminals to the United States if Washington did the same for Moscow and the two powers reached an agreement to that effect.

The Russian leader said he expected the Geneva meeting to help establish bilateral dialogue and revive personal contacts, adding that important issues for the two men included strategic stability, Libya and Syria, and the environment.

Putin also praised Biden for having shown “professionalism” when the United States and Russia agreed this year to extend the New START nuclear arms control treaty.

The White House has said Biden will bring up ransomware attacks emanating from Russia at the meeting. That issue is in the spotlight after a cyberattack disrupted the North American and Australian operations of meatpacker JBS USA.

A Russia-linked hacking group was behind that attack, a US source familiar with the matter said last week.

Asked if Russia would be prepared to find and prosecute cyber criminals, Putin said Russia’s behaviour here would depend on formal agreements being reached by Moscow and Washington.

Both sides would have to commit to the same obligations, he said.

“If we agree to extradite criminals, then of course Russia will do that, we will do that, but only if the other side, in this case the United States, agrees to the same and will extradite the criminals in question to the Russian Federation,” he said.

“The question of cyber security is one of the most important at the moment because turning all kinds of systems off can lead to really difficult consequences,” he said.

With agency inputs

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12 killed, 138 injured in gas explosion in China



HUBEI: At least 12 people were killed and 138 were injured in a huge gas explosion in central China on Sunday, state media reported.

A gas pipe exploded in the Zhangwan district of Shiyan city, in Hubei province at about 6:30 am local time. The number of casualties is still being verified as the search and rescue operation is underway. According to the local authorities, 150 people have been pulled from the debris, and the injured are being treated at local hospitals.

Apparently, the explosion destroyed a wet market there and greatly affected nearby residents. “Hearing the loud bang, I immediately scrabbled beneath the table, thinking it was an earthquake,” a resident surnamed Liu, told the Global Times via phone.

Images are circulating on social media, which appeared to be from the scene, showed rescue workers in orange jumpsuits working through the wreckage of flattened houses.

The cause of the accident is under investigation, according to the city government, which informed on the Chinese microblogging platform Weibo.

Rescue operation is underway and more details are awaited. ANI

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Amid the raging Covid-19 pandemic, Saudi Arabia has once again barred foreigners to perform the Hajj, and set a limit of maximum of 60,000 pilgrims inside the Kingdom.

“Only 60,000 vaccinated residents and citizens living in the Kingdom will be allowed to perform this year’s Haj pilgrimage due to the ongoing coronavirus pandemic,” the Ministry of Haj and Umrah announced in a statement cited by Gulf News on Saturday. The Hajj is one of Islam’s five pillars. Every able-bodied Muslim who has affordability tries to visit it at least once in a lifetime.

“Against the backdrop of what the world is witnessing and due to the continuous developments of the coronavirus pandemic as well as the emergence of new mutations, Haj registration will be limited to residents and citizens from inside the Kingdom only,” the ministry also Twitted.

“Muslims between the ages of 18-65 and are fully vaccinated, or those who received their first dose at least 14 days prior, those who are vaccinated and have recovered from a Covid-19 infection are allowed to register,” the ministry added.

This is the second year in a row that Saudi Arabia limits the Haj pilgrimage to Muslims inside the Kingdom. However, only 10,000 Muslims were allowed to perform Hajj last year.

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The US and Japan have been deepening their engagement with Taiwan to help guard it against a growing threat from China. The move has out Beijing in tight spot.

J. Michael Cole, writing in The National Interest said that the regime in Beijing, which continues its effort to isolate Taiwan internationally, is now in the difficult position of having to express its discontent over coronavirus response while avoiding overreaction that could create the rationale for even closer relations between Taiwan and other countries. Taiwan has had a fairly positive past month in terms of its engagement with, and support by, regional partners.

Beijing’s setbacks began back in April, with the joint statement between US President Joe Biden and his Japanese counterpart, Prime Minister Yoshihide Suga, which “underscore[d] the importance of peace and stability across the Taiwan Strait and encourage the peaceful resolution of cross-Strait issues.”

Such direct reference to Taiwan by a Japanese prime minister had not been heard for more than half a century, reported The National Interest. This was followed the next month by a similar statement, this one by President Biden and South Korean President Moon Jae-in, which again “emphasise[d] the importance of preserving peace and stability in the Taiwan Strait”.

The unprecedented reference to Taiwan by a South Korean leader also signalled those countries within the region were becoming increasingly alarmed with China’s destabilising behaviour—particularly the high number of intrusions by aircraft from the People’s Liberation Army Air Force and Navy into Taiwan’s southern Air Defense Identification Zone (ADIZ), wrote Cole.

Four days before the Biden-Suga joint statement, a total of twenty-five PLA aircraft–14 J-16 multi-role fighters, four J-10 multi-role fighters, four H-6K bombers, 2 Y-8 anti-submarine planes, and one KJ-500 airborne early warning and control plane–entered Taiwan’s ADIZ, a new high since the PLA began intensifying its military activity in the region in 2020, reported The National Interest.

But now, China is in a tight spot as Taiwan is receiving more attention from allies. One strategic mistake Beijing may have committed earlier this year was its refusal to reduce its military activity around the Taiwan Strait during the transition period in Washington, wrote Cole.

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WHO chief asks China to cooperate with probe into Covid-19 origins



Tedros Adhanom Ghebreyesus.

World Health Organization (WHO) chief Tedros Ghebreyesus has called on China to cooperate with the ongoing investigation into the origins of the Covid-19 amid renewed call to further probe the virus.

Dr Tedros made these remarks after taking part in the Group of Seven (G7) summit by video conference on Saturday, The Wall Street Journal (WSJ) reported.

The WHO Director-General hoped there would be better cooperation and transparency when the next phase of the probe into the virus’s origin is underway. “As you know we will need cooperation from the Chinese side,” he said. “We need transparency to understand or know or find the origin of this virus…after the report was released there were difficulties in the data sharing, especially in the raw data.”

He further said that the preparations for the probe’s next steps were underway and that the issue of the origin of the virus was discussed by G7 leaders on Saturday, WSJ reported.

Earlier this week, the US and the UK had extended support to a “timely, transparent and evidence-based independent process” for the next phase of the WHO-convened study of Covid-19 origins. “We will also support a timely, transparent and evidence-based independent process for the next phase of the WHO-convened COVID-19 origins study, including in China, and for investigating outbreaks of unknown origin in the future,” a joint statement said after US President Joe Biden met British Prime Minister Boris Johnson on Thursday.

This comes amid growing calls for a timely, transparent, and evidence-based independent process for the next phase of the WHO-convened origin study.

Recently, the calls to investigate further the origins of the virus have intensified. President Biden has also ordered a fresh US intelligence inquiry into the origins of the pandemic.

The origin of novel coronavirus that caused havoc around the world has remained a mystery even after 1.5 years the first case of infection was reported in the Chinese city of Wuhan.

Now, scientists and world leaders are calling for further investigations to figure out whether the virus originated naturally or leaked from the Wuhan Institute of Virology.

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In a veiled criticism of the Dragon, Group of Seven (G&) leaders called on China to respect human rights in its Xinjiang region, allow Hong Kong a high degree of autonomy, and refrain from any unilateral action that could destabilise the East and South China Seas, Reuters reported quoted a draft version of the G7 summit communique.

“We will promote our values, including by calling on China to respect human rights and fundamental freedoms, especially in relation to Xinjiang and those rights, freedoms and high degree of autonomy for Hong Kong enshrined in the Sino-British Joint Declaration,” the G7 said in a communique that was almost finalised.

Before the G7 criticism emerged, China cautioned G7 leaders that the days when “small” groups of countries decided the fate of the world were long gone.

The G7 also said they underscored “the importance of peace and stability across the Taiwan Strait, and encourage the peaceful resolution of cross-Strait issues”.

“We remain seriously concerned about the situation in the East and South China Seas and strongly oppose any unilateral attempts to change the status quo and increase tensions.”

“We also call for a timely, transparent, expert-led, and science-based WHO-convened Phase 2 Covid-19 origins study including, as recommended by the experts’ report, in China,” the communique, which is almost finalised, said.

“The days when global decisions were dictated by a small group of countries are long gone,” a spokesman for the Chinese embassy in London said.

“We always believe that countries, big or small, strong or weak, poor or rich, are equals, and that world affairs should be handled through consultation by all countries.”

Beijing has repeatedly hit back against what it perceives as attempts by Western powers to contain China, and says many major powers are still gripped by an outdated imperial mindset after years of humiliating China.

UN experts and rights groups estimate over a million people, mainly Uyghurs and other Muslim minorities, have been detained in recent years in a vast system of camps in Xinjiang.

China denies all accusations of forced labour or abuse. It initially denied the camps existed, but has since said they are vocational centres and are designed to combat extremism. In late 2019, China said all people in the camps had “graduated”.

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