Tag: Manpreet Badal

May declare every millimetre of Punjab a mandi: State FM on farm bill row

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The government of Punjab is considering declaring every millimetre of the state as a mandi, state FM Manpreet Badal said, to challenge the central government’s passage of the farm bills.

The law, which allows farmers to sell produce outside government-controlled APMC mandis (or market yards) directly to companies, traders or even consumers, has led to farmer protests, especially in the northwestern states of Punjab and Haryana.

Protesters say that the law not only threatens to bring farmers under control of influential corporates, it could also be a sly attempt by the Centre to do away with the minimum state price (MSP) – something that PM Narendra Modi has personally denied.

“We are seriously considering declaring every millimetre of Punjab a mandi if that is what is need to protect the interest of farmers,” the state FM said.

Declaration of Punjab as a mandi will ensure farmers selling directly to third parties will get MSP and the state earns its mandi tax, though it is not clear if such a radical decision will be legally tenable.

Badal added that Punjab has decided to challenge the law in the Supreme Court on two grounds. “Agriculture is a state subject. And the law does not allow one govermment – in this case the Centre – to destroy the economy of another,” he said, adding that there was no need to tinker with a system that was working well.

Economists have noted that protests are most vocal in Punjab and Haryana as nearly 90 percent of the states’ rice – the primary grain covered under MSP besides wheat — is procured by the government, compared to 10-20 percent in states such as UP and West Bengal.

But FM Badal said the opposition was not protesting for the sake of protesting. “This was said even during demonetisation and GST rollout. The mandis allow efficient price discovery and help develop the local infrastructure, which private players will not be incentivised to do.”

Badal also brought up the CAG report, which said that the Centre had misused funds that was to be given to states as part of GST compensation.

He added that Punjab has not agreed to the two options that the Centre has proposed to make good losses incurred by states through the GST rollout, and will continue to oppose the Centre’s decision.

“We want a third formula,” he said.

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Punjab FM rejects Centre’s two proposals; calls non-payment of GST dues a breach of constitutional assurance

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Two days after the Centre circulated a letter to all states, listing out the two options to make good for the inadequate funds in compensation the cess kitty, Punjab Finance Minister Manpreet Badal has written to Union Finance Minister Nirmala Sitharaman and informed that Punjab has declined both the options as the options provided and called it a ”breach of constitutional assurance”.

CNBC-TV18 managed to access Badal’s letter, which calls for an urgent GST Council meeting to address the issue.

“Punjab would like full clarity on each of these issues and the matter once again placed on the agenda of the next meeting which may be called urgently,” Badal in his letter said.

Punjab has also recommended “constitution of a GOM (Group of ministers” on the matter” on an urgent basis as an alternate mechanism.

Highlighting that the GOM should be time-bound to provide a resolution in 10 days.

He also says that the council “needs to work towards a lasting solution to reduce compensation”.

Badal in his argument has said that the “compensation can neither. be increased nor reduced without amending this Act. Compensation is no more an executive decision at any level of the Government or even the Council.”

“The least Centre has to do to carry forward with the given options is to get them enacted through the legislative process and that too on the recommendation of the Council,” Badal in his 5-page letter said.

“Council otherwise doesn’t have the power to alter the compensation mechanism suo motto. This was also the essence of the assurance that compensation provision will be legislated and not left to the executive discretion.” Badal added.

Punjab is now the highest GST-deficit-State in India, he mentioned.

“It is also not clear when shall the impact of Covid-19 be agreed to have tapered off. We should also have clarity about the scenario likely to emerge if we continue to follow a similar approach going forward,” Badal alerted Sitharaman. And has asked Centre on “How will compensation be calculated in the period after January 2021?”

He further said that “If projections are made till the end of compensation period (with reasonable assumptions) the total revenue loss may cross Rs 4,50,000 crore. This, together with interest, would require more than 4-5 years to repay the borrowings rather than 2-3 years that is being believed.”

Centre on August 27, in the 41st GST Council Meet, had presented 2 options to states to deal with the on-going compensation cess issue.

Post the meeting, several states have been expressing concerns on the two options saying that the two options are not acceptable.

Badal has added that “It would help if the issues raised in this letter, and by others, are addressed through an agenda paper circulated well in advance. Views may also be invited on resolving the possible dispute under the mechanism provide under Article 279A ( 11) of the Constitution.”

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Punjab FM suggests 5 measures to Sitharman to resolve GST compensation issue

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Manpreet Badal, the finance minister of Punjab, has written to Union Finance Minister Nirmala Sitharaman opposing any move to make states borrow in order to make up the shortfall of their GST compensation kitty. Badal has suggested five measures to resolve the compensation issue.

Here’re Manpreet Badal’s 5 suggestions:

• Revise specific rates of compensation cess to factor in inflation
• Subsume central excise duty on cigarettes and tobacco into cess
• Use collections from goods, services where rate was cut from 28 percent to fill kitty
• Use balance IGST amount to meet current shortfall in kitty
• Use central borrowings to make up if shortfall remains after implementing measures

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Punjab FM Manpreet Badal writes to Piyush Goyal, calls for GST 2.0

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Punjab Finance Minister Manpreet Badal last week wrote to interim Finance Minister Piyush Goyal, expressing deep concerns as the government braces for a fresh version of GST laws – ‘GST 2.0.’

Badal in a letter to Goyal on June 22, said that GST Council should follow “an open minded approach with healthy stakeholder consultations before another round of legislative changes.”

He also impressed upon the need for changes in GST law adding, the law today “was a work done in a hurry without adequate stakeholder consultations.”

The three paged letter also highlighted that the council has ignored some of the recent suggestions, which were made by law review committee and Gautam Ray committee, the two platforms constituted to improve the existing law on a time to time basis.

Badal, who is also member of GST groups of ministers relating to incentivizing digital payments, cited examples, where government in the past did not engage in enough stakeholder consultations and passed changes in the laws.

“In January 2018, I found the revised GST law was approved in less than 30 minutes without any suggestions at ministerial level,” Badal said in the letter.

Badal further emphasised on the fact that GST Council discussions should be “wide enough and leave a taste of adequacy, transparency, open-mindedness and recognition of global best practices.”

The strong-pitched letter has put suggestions for Goyal, which Badal has pointed for him to ponder upon.

Badal, who has also marked a copy of the letter to union finance secretary Hasmukh Adhia, has suggested that new proposed changes in law should be put in public domain and for at least one round of trade and industry consultations.

He has further added that final draft should be circulated to states at least one month in advance for their perspective. Badal also called for the allocation of an adequate period for detailed ministerial meetings on all proposed changes.

Post receiving suggestions from GST Council, one more round may be kept for finalisation of constitution of a sub-committee of a group of ministers to facilitate the changes, Badal in the said letter added.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

GST Council Meet: Sugar cess leaves a bitter after-taste

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Goods and Services Tax (GST) Council on Thursday deferred decision on levying a cess on sugar.

The division in the GST Council came out in the open after West Bengal Finance Minister Amit Mitra said that many states are concerned on the fundamental principle of cess.

The central government’s proposal to impose Rs 3 cess per kg of sugar was to help the mills to clear the due owed to the sugar cane farmers.

“All cesses have been subsumed under GST. Now, if you bring a cess for a particular commodity, there are other candidates as well. For example, for Kerala, I say let’s have a cess for rubber. Why sugar alone?” asked Kerala Finance Minister Thomas Isaac.

Bihar Deputy Chief Minister Sushil Kumar Modi defended the sugar cess, “It’s a wrong perception that it (sugar cess) is a distortion. It’s already written in the law that the GST Council can take a decision to impose cesses. It’s not a distortion, compensation cess already exists.”

Click here to read what went down at the GST Council meet. 

Under the GST, the government has subsumed all the cess, taxes and surcharge but bringing back the cess will open a plethora of request from other states, which will create more problem for the NDA-government.

“If you impose a cess for sugar, then what stops states (from demanding cess on other products), say in Punjab’s case potatoes or cotton. Because farmers are in distress and this (cess) will open the floodgates and distort the sanctity of GST,” said Manpreet Badal, Punjab Finance Minister.

Briefing about the meeting, Union Finance Minister Arun Jaitley said the state finance ministers committee would be announced over the next two days on proposal of levying cess on sugar.

He said, “Considering that the cost of sugar has risen beyond Rs 35 per kg and the market price is between Rs 26 and 28 per kg, the sugarcane farmers are in deep distress and therefore can we impose some kind of cess?”

“Now since this is after GST has been implemented, this is the first suggestion has come up. How are such contingencies to be addressed in the GST regime, are they to be addressed by imposition of cess or are they to be addressed by temporarily increasing the tax or by some alternative method of revenue raising,” the Union Finance Minister said.

Once the decision is taken by the GST Council, the government would come out with an ordinance to impose cess on sugar, Finance Secretary Hasmukh Adhia told reporters after the 27th meeting of all-powerful Council held through video-conferencing.

Earlier this week, the Union Cabinet had approved a subsidy of Rs 5.5 per quintal of cane to address the distress situation. The subsidy would be directly transferred to cane farmers.

India’s sugar production touched an all-time high of 29.98 million tonnes till April 15 in the current season on higher cane output, leading to a surge in arrears to farmers at over Rs 20,000 crore, according to industry body ISMA.

Sugar output of India, the world’s second largest producer, stood at 20.3 million tonnes in the 2016-17 marketing year. The annual domestic demand is estimated at 25 million tonnes.

To clear cane arrears, the association has demanded that the government should provide production-linked incentive to cane farmers as it was done in 2015-16 marketing year. Sugar marketing year runs from October to September.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow