Bhupesh Baghel Seeks 5-year Extension of GST Compensation at NITI Aayog Meet

Chhattisgarh Chief Minister Bhupesh Baghel on Sunday reiterated his demand to the Centre for a five-year extension of compensation paid to states for revenue shortfalls caused by GST implementation, as well as a revision of royalty rates for coal and other major minerals from the state.

Baghel stated during the meeting of the seventh Governing Council of NITI Aayog, which was chaired by Prime Minister Narendra Modi, that the state's demand for GST compensation, transfer of the amounts collected as 'additional levy' from coal block companies, and reimbursement of Rs 11,828 crores spent by the state government to combat Naxalism.

The GST tax system has resulted in a loss of revenue to states, and the Centre has not made arrangements to compensate the state for the loss of revenue of about Rs 5,000 crore in the coming year, so the GST compensation grant should be continued for the next five years after June 2022, the chief minister was quoted as saying in a statement issued by his government.

When a nationwide GST replaced 17 central and state levies on July 1, 2017, it was decided that states would be compensated for any revenue loss from the new tax for five years, he said, adding that the timeframe ended this year on June 30.

States were promised compensation for revenue loss until June 2022 when the GST was implemented. The compensation amount was raised by levying a cess on luxury, demerit, and sin goods in addition to the 28% tax.

Non-BJP-ruled states such as Chhattisgarh (Congress-ruled), Kerala (LDF-ruled), and Rajasthan (Congress-ruled) have previously demanded that the compensation regime be extended by five years, according to the statement.

Baghel stated that Chhattisgarh has received Rs 13,089 crore less from central taxes in the last three years, putting extreme strain on the state's resources. He demanded that the state receive the full share of central taxes in the upcoming budget. Baghel also demanded that the Rs 4,140 crore deposited with the Centre on coal mining from coal block companies be transferred to Chhattisgarh as soon as possible.

Noting that iron ore mines generate approximately 65 percent of the state's mineral revenue, he called for royalty rates to be revised as needed in the state's financial interest. Baghel requested a change in royalty rates for coal and other major minerals. He also urged the state government to move quickly on other outstanding issues, such as refunding deposits in the New Pension Scheme and ensuring the availability of jute gunny bags.

Baghel also proposed that agricultural research institutes be charged with providing free seeds of newly developed crop varieties, mini kits, and breeder seeds on a large scale in order to ensure crop diversification and an increase in pulse and oilseed production and productivity. The chief minister stated that Chhattisgarh is self-sufficient in food grain production and has implemented numerous innovative measures to increase the state's production of pulses and oilseeds.