Who will be going to pay interest on GST Loans?
The news has appeared prominently altogether in the newspapers of the country and particularly within the business newspapers that the central government released 42 thousand crores rupees to the states under the outstanding GST. The middle has raised this amount by taking loans.
The loan has been taken in seven installments of six-six thousand crore rupees, with a mean rate of interest of 4.7 percent. The last installment rate of interest is above five percent. It’s been told within the news that Karnataka possesses the foremost money then Maharashtra. But it’s not been said that who will repay the large interest of 4.7 percent on the loan?
When the debt is to be repaid by the recovery of GST on a part of the states, then the interest also will need to be repaid to them. But this has not been formally started yet. Now think, what was the benefit to the states of GST implemented with such fanfare? They gave their rights to levy or collect VAT or other taxes to the middle.
The middle promised him that for the primary five years, he would pay 14 percent more tax per annum than the previous year to the states and if unable to offer compensation. For this, additional taxes were levied on many items.
But when the recovery was less, the central government raised its hands. He asked the states to require a loan. When the states weren’t ready, the middle took a loan reciprocally for the states’ tax, which might not tend to the Center’s account so that its fiscal deficit wouldn’t increase. Think, it could happen in India that the Indian government took the debt but the financial deficit didn’t increase, so it’ll be shown within the capital receipts of the states.
Debt made capital! within the hope that there’ll be further recovery. What if not? within the situation of the economy, the crisis has got to keep going for 2 years, and therefore the crisis of India is already happening before Corona. So, the sword is going to be hanging on the neck of the states, and therefore the debt interest is going to be paid from their share of GST.