West Bengal finance minister Amit Mitra on Thursday said that roll out of the Goods and Services Tax (GST) should be deferred in view of the ‘destabilising’ affect of demonetisation and till the economy gets back on track. “The GST rollout in itself is destabilising but for a good cause. It is destabilising on the exchequer of all states,” Mitra said in a TV interview.
The Mamata Banerjee government in West Bengal had supported the GST from the start, but has changed its tune after the demonetisation move, claiming it will bring great hardship to the common people who are already reeling under the impact of a cash crunch. Mitra who had headed the empowered group of ministers for the GST, said the GST council had decided that compensation to states would not be provided from the Consolidated Fund of India but from a special fund corpus of Rs 50,000 crore.
Mitra, also the chairman of the empowered committee on GST, said that the decision to demonetise old Rs 500 and Rs 1,000 notes by the Centre “was a tsunami which hit the country”. “Will the country be able to take the two hits, GST and demonetisation at the same time?” he asked. “GST is lost in the horrible case of demonetisation. Once implemented it will be good for the country as happened in Canada, New Zealand Australia and Canada”, he said.
The next meeting of the GST Council is slated for December 11-12.
Mitra also hit out at the Modi government for the demonetisation move and also said that a “senior Union cabinet minister” confided in him saying that he only got to know of the decision when the PM made the announcement on television. “He (the Union Cabinet minister) said we were herded into a room where the we saw the PM making the announcement on the TV screen,” Mitra narrated during the interview, elaborating that there are no democratic practices in the Modi Cabinet.