The burden of borrowing from markets to make up for the deficit in goods and services (GST) compensation due from the Centre cannot be solely on states, Punjab finance minister Manpreet Badal said in a letter to Union finance minister Nirmala Sitharaman.“States should not be made to bear the burden of borrowing, which in any case is likely to be higher than the rate at which the central government will be able to borrow,” Badal said in the letter dated July 3, a copy of which was seen by ET.Badal suggested a combination of borrowing and bringing more products such as tobacco and cigarettes, and other goods used predominantly by the rich, under the ambit of compensation cess to overcome the deficit.“In federal polity there shall always be some dispute on legal interpretations… Constitution allows their healthy resolution through a mechanism that is yet to be operationalised,” said Badal.The Punjab finance minister’s comments came close on the heels of the attorney general’s opinion that...
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