Credit Battle Erupts After GST Cuts; Mamata Banerjee Says States Drive Relief Not Centre

In the wake of recent reductions in Goods and Services Tax (GST) on essential services and commodities, political leaders across India engage in a contest to claim credit for the relief.

West Bengal Chief Minister Mamata Banerjee voices strong criticism of the central government, asserting that the measure originates from demands raised by state administrations rather than from the Union’s initiative.

Banerjee stresses that she had first written to the Union government seeking the removal of GST on insurance premiums and several life-saving medicines, contending that the subsequent cuts reflect state pressure rather than central generosity.

She maintains that the entire relief package is borne by state treasuries, with no additional funding arriving from New Delhi.

States Bear the Financial Burden

According to Banerjee, the Centre continues to withhold or delay allocations under crucial schemes such as the rural employment programme, housing initiatives, road projects, Jal Swapno and Sarva Shiksha Abhiyan.

She claims that this situation imposes a loss of approximately Rs 20,000 crore on West Bengal while simultaneously portraying the Union government as the provider of benefits.

The Chief Minister states that her administration still welcomes the relief for ordinary citizens, but expresses concern over the absence of compensation for states.

She argues that the funds have effectively been deducted from the states’ GST share and predicts that the ‘double engine’ government will reclaim the financial benefit through indirect means.

Banerjee’s remarks reflect a broader political struggle, with opposition leaders from various states accusing the Centre of leveraging fiscal decisions for political mileage while shifting the financial burden to state budgets.

Her intervention adds to the growing debate over fiscal federalism and transparency in revenue sharing.

Observers note that the GST Council’s recent decisions, although welcomed by the public, have reignited questions about the balance of power and accountability between state governments and the Union.

As the relief measures roll out, the contest over who deserves credit underscores the political stakes of tax policy in a federal system.

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