If the states are forced to borrow, the axe will inevitably fall on capital expenditure by the states which has already suffered a cut: P Chidambaram

P Chidambaram – Former Union Finance Minister:

  • Government says it will give a ‘Letter of Comfort’ to the states to borrow money to bridge the GST Compensation gap

  • These are just words of comfort on a piece of paper that has no value

  • What states need is hard cash. Only the central government has multiple options and the flexibility to raise the resources and pay the shortfall in GST compensation to the states

  • If the states are forced to borrow, the axe will inevitably fall on capital expenditure by the states which has already suffered a cut

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