‘Governance Failure? How Much More Would've Been Sufficient? Can Somebody Put A Number? Impossible'

Battling crises has become second nature for finance minister Nirmala Sitharaman. If it was the economic slowdown in 2019 when she took charge, now the Covid pandemic that hit India soon after in 2020 poses near-, medium- and long-term challenges. In an interview with TOI’s Sidhartha,Surojit Gupta and Rajeev Deshpande, the FM made it clear that funds will not be a problem either for healthcare or meeting other requirements of the economy, while maintaining that it was impossible to anticipate the speed and intensity with which the second wave hit the country. Excerpts:

- Sidhartha,Surojit Gupta and Rajeev Deshpande

How has the second wave affected GST collections?

It will certainly be better than what we used to get in October-November, but with some states under lockdown — and the e-way bills are indicating that — there could be some reduction. I want to maintain April’s level (of Rs 1.4 lakh crore). But I don’t see this dip as being something that will continue in the next few months. Last month was particularly bad, now we are already seeing that it is improving.

For the full year the revenue secretary said the compensation shortfall would be around Rs 1.5 lakh crore. States are suggesting a higher number...

Even last year there were calculations and calculations. There was also this thing about why you would want to differentiate between the protected revenue, based on (the promised) 14% growth, and the actual reduction in collections, resulting in a larger gap because of Covid. Debates will happen and I am very keen on hearing them. Even on Friday (when the GST Council met), I sat through it and heard everybody. The formula for compensation borrowing has been in place since last year. We will take it from there. This year itself if I get better revenues, last year’s dues, which have not been paid, can be paid. That need not be a borrowing (to that extent). There is also this concern that after July 2022, once the cess collection stops, are we going to fall off the cliff because we won’t have anything to collect or share? For that, we will have a separate session.

A group of ministers has been set up to examine the issue of rates on items such as vaccines, drugs, oxygenrelated equipment needed to fight Covid. There were two suggestions from states, one was zero duty and the other one was zero-rating. What are the reasons to not take them up?