Question

The concerns of the states regarding GST compensation methods are :

1. Breach of the FRBM target with respect to fiscal deficit
2. Use of clause of Force Majeure by the center unilaterally

• A.
  1 only
• B.
  2 only
• C.
  Both 1 and 2
• D.
  None of the abov

Answer 1

The correct option is C

Both 1 and 2
Due to Covid 19 imposed lockdown and negative impact on the Economy, the centre unilaterally used the clause of Force Majeure in order to avoid paying GST compensation to the states. One of the options available to the states as a result of this was to borrow from other sources, which could lead to their breaching of their FRBM targets.