NEW DELHI: Even as Finance Minister Nirmala Sitharaman admitted on Friday that pending GST compensation payments are a problem for the states, she remained non-committal on providing a timeframe within which the Centre intends to transfer these funds. According to the Centre’s submissions in Parliament this week, these payments have been pending since August.
When queried on when the payments will be made, Sitharaman said, “I’m also saying that it is an article of faith and we should keep up what has been coming...in terms of giving compensation to states”. Sitharaman had assured in Parliament on Thursday that the Centre will honour its commitment.
Sitharaman, however, has clarified that it is not just non-Bharatiya Janata Party states which have not compensation since August, but all of them.
The minister, who was giving a preview of the economy ahead of the Union Budget exercise and the upcoming Goods and Services Tax (GST) meeting, also denied that her ministry was conducting any discussion regarding a GST hike on selective commodities.
“The buzz is everywhere except in my office. I have had no conversations on the GST Council meeting with my team yet,” the finance minister said. However, she did not rule a hike in GST rates, pointing out that her ministry is yet to apply its mind to it.
While her team gave a detailed presentation on all the measures taken by the government in the recent past, the press conference saw Sitharaman evade most difficult questions on the state of the economy.
When asked when she expects the economy to revive, Sitharaman said, “I’m not engaging in any prediction based thing. I am looking at the economy. Where I need to intervene, I am intervening and I shall continue to address the problem of the industry as and when it rises”.
The finance minister also declined to comment on whether the country is undergoing stagflation — high inflation coupled with declining growth. “No comment on that. I have heard it. Stagflation is a narrative which is going on. I am hearing it,” Sitharaman further said.
Rising food prices had pushed retail inflation in November to an over three-year high of 5.54 per cent, while industrial sector output shrank for the third month in a row by 3.8 per cent in October, indicating a deepening slowdown in the economy. Stagflation is a situation in which the inflation rate is high, the economic growth rate slows, and unemployment remains steadily high.