Tamil Nadu Minister Urges Centre to Protect State Revenue Amidst GST Rate Rationalization

Tamil Nadu's Finance and Environment Minister, Thangam Thennarasu, participated in a meeting of Group of Ministers in New Delhi, where he emphasized the need for the Centre to safeguard the revenue of states, including Tamil Nadu, amidst the Goods and Services Tax (GST) rate rationalization. The Minister termed the GST rate rationalization as a welcome measure but cautioned that the tax rates rationalization should not lead to a reduction in revenues for states. Thennarasu highlighted the importance of protecting the revenue of states, especially in the social welfare sector, where Tamil Nadu is investing in health and education to achieve full human potential.

Key Takeaways:

• Thangam Thennarasu emphasized the need for the Centre to protect the revenue of states, including Tamil Nadu, amidst GST rate rationalization.
• The Minister urged the Centre to extend the compensatory cess for 4 to 6 years to compensate for revenue loss due to reduced GST rates.
• Thennarasu also requested the raising of the net borrowing ceiling of states to 4% of GDP without conditions to help compensate for revenue loss.
• The Tamil Nadu Government is willing to cooperate in restructuring the GST rate regime, while ensuring the interests of states' revenues are safeguarded.
• Thennarasu noted that states like Tamil Nadu are investing in social welfare schemes, such as health and education, to achieve full human potential.

Statistics:

• 4-6 years: duration for which compensatory cess should be extended to compensate for revenue loss due to reduced GST rates.
• 4% of GDP: proposed net borrowing ceiling for states without conditions.
• Tamil Nadu: one of the states highlighted by Thennarasu as investing in social welfare schemes, such as health and education.

Sources:

• United News of India, Chennai, Aug. 21.
• SyndiGate Media Inc. with permission from United News of India.