Kolkata, Dec 8 (IANS): Chairman of the Empowered Committee of State Finance Ministers and member of the GST Council Amit Mitra on Thursday said the postponement of the Goods and Services Tax regime could be “an option” to stabilise the economy as it was badly hit due to demonetisation.
“Demonetisation already hit the economy. Can the economy take two hits? Can the companies restructure themselves and can the governments restructure themselves? These are the big questions of the day,” he said.
“Should we rethink of stabilising the economy from this big hit resulting from demonetisation and then go for GST?”
“This is an option,” the West Bengal Finance Minister said.
He said all the decisions were taken before November 8 when Prime Minister Narendra Modi announced the ban on high-value currency notes.
“All the decisions were taken on the basis of a crisis situation that the country will face for a good cause. Nobody knew at that time the country will face an economic destabilisation resulting from demonetisation. A tsunami has hit the country’s economy,” he said.
Mitra said that the council had decided that states would not take the compensation from the consolidated fund of India and a special fund would be created for the purpose.
The council had decided that the base year for calculating the revenue of a state would be 2015-16 and secular growth of 14 per cent would be taken for calculating the likely revenue of each state in the first five years.
“Due to demonetisation, every state will be under 14 per cent (revenue growth) because of the destabilisation in the economy. Thus, Rs 50,000 crore fund will not be enough. What will happen to states’ resources?”