Finance Minister Nirmala Sitharaman and Congress MP Adhir Ranjan Chowdhury sparred in Parliament Monday over allegations non-BJP state governments – specifically those in South India – are “deprived of their (financial) dues” and allocations, including those related to GST compensation.
An incensed Ms Sitharaman hit back, explaining “devolution to states… happens as per Finance Commission recommendation”, and that she had no “discretion” in allocation of tax revenues. She also slammed the allegations as a “politically-vitiated narrative” being spread by “vested interest groups”.
The exchange came at the tail end of a debate on the “financial viability of states/union territories”, and was triggered by Mr Chowdhury, the Congress’ leader in the Lok Sabha accusing Ms Sitharaman, and the ruling BJP, of “arbitrary” and “discrimination” position towards opposition-ruled states.
“The latest example is Karnataka… where entire ministry has been agitating against the indiscriminate attitude of your administration. Few months ago everything was hunky dory. But, after the new government (came), since then trouble has started,” the Congress leader began.
He was referring to comments by Karnataka Chief Minister Siddaramaiah last week about “step-motherly treatment of the state – which the Congress won in the May 2023 election – in 2024 Interim Budget. The Chief Minister and his deputy, DK Shivakumar hit out over a lack of allocations by Ms Sitharaman, and alleged revenue loss of over Rs 11,000 crore under the 15th Finance Commission.
The Karnataka leaders are due to hold a protest in Delhi on Wednesday.
The Finance Minister began with a short explainer on GST and its three primary components – SGST, or State Goods and Services Tax; IGST, or Integrated Goods and Services Tax (levied on interstate supplies of goods and/or services); and CGST, or Central Goods and Services Tax.
“… SGST goes 100 per cent to states… this is automatic provision. IGST involves interstate payments (and) is periodically reviewed (and,) because states should get money in hand, it is divided and then periodically adjusted to actuals. CGST is divided as per Finance Commission,” she told Parliament.
“I want to humbly submit… so Adhirji please understand… I don’t have the right to change (allocations) as per my whims and fancies… or because I like a state (government) or if another is ‘against’ my party politics. No way!” Ms Sitharaman said decisively, “I have no role…”
“I have to follow 100 per cent (the Finance Commission recommendations) and that is what every Finance Minister does. When there is a recommendation, it is done without fear or favour.”
“So this apprehension… that some states are being discriminated against… is a politically-vitiated narrative that, I am sorry to say is (because) vested interests are happy to go about saying it.”
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An increasingly furious Ms Sitharaman shot down the claims, saying, “There is just no possibility of any Finance Minister intervening, and saying, ‘I don’t like this state, so stop payment. No way.”
The Finance Minister then ripped into the Congress leader’s “hunky dory” claims.
“Adhirji is saying that till six months ago everything was ‘hunky dory’. If that was so then what went wrong? Have you started spending on items you are not supposed to spend? I am not questioning that… but you spent it, so don’t put the blame on centre, because it goes by the rule book.”
Ms Sitharaman, who seemed to be increasingly exasperated by Mr Chowdhury’s interruptions, concluded by trying to shout down the Congress leader, saying, “I can’t do anything if Finance Commission doesn’t tell me to do… Adhirji, please don’t imagine I have any discretion.”
“Please talk to the Finance Commission…” she said with a namaste as she sat down.
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