Will messenger of God answer? Chidambaram's swipe at Sitharaman over 'economic mismanagement' in pre-Covid era

In a series of tweets, Chidambaram said, "If the pandemic is an ‘Act of God’, how do we describe the mismanagement of the economy during 2017-18 2018-19 and 2019-20 BEFORE the pandemic struck India? Will the FM as the Messenger of God please answer?"

After meeting the decision-making body for fixing GST policies, Sitharaman had said, "This year we are facing an extraordinary situation. We are facing an act of God where we may even see a contraction."

The government said it has a shortfall in revenue of Rs. 2.35 lakh crore for the fiscal year 2021.

Sitharaman said the Centre has released over Rs. 1.65 lakh crore as GST compensation to the states for the fiscal year 2020.

Even before Covid-19 had hit India, the country of 1.3 billion people was suffering from an economic slide with Gross Domestic Product (GDP) nosediving in each passing financial quarter.

Related Story: Coronavirus act of God which affected GST collections: Nirmala Sitharaman

One of the options that the GST Council has considered to pay off the dues to the states is by borrowing from the Reserve Bank of India (RBI).

Sitharaman had said, "Two options were placed before the states. We can facilitate through RBI. States have asked to put us both the options in a detailed form today and give them seven working days, after that they will come back.

"It means we can have a small meeting on GST. We will take a call. Two bi-monthly payments are delayed this year. We want only for this year. The GST Council can look into the payments again in April next year." 

Targeting Sitharaman and the central government, Chidambaram tweeted, "Under the second option, States are asked to borrow from the RBI window. It is more market borrowing, only by a different name. Again, the entire financial burden falls on the States."

"The central government is absolving itself of any financial responsibility. This is a gross betrayal as well as a direct violation of the law," the former Union Finance Minister tweeted.

Chidambaram in an unsparing criticism of the Centre's suggestion to draw money from the RBI said, "The two options given by the Modi government to the States to bridge the GST Compensation gap is a gross violation of the law and an abdication of the responsibility of the central government."

"The latest assault on the States is part of an elaborate design of the Modi government to financially cripple the States and reduce them to beg for money from the Centre."

Suggesting the state governments to reject the Centre's proposal, he added, "States must reject both options and demand, in one voice, that Centre must find the resources and provide the money to the States."