Govt indulging in 'coercive' federalism by eroding independence of states, alleges Cong
GST
Dated:- 20-9-2025
PTI
New Delhi, Sep 20 (PTI) The Congress on Saturday accused the government of indulging in “coercive” federalism by eroding independence of states and reducing them to municipalities while citing a CAG report that claimed debt on states has risen to nearly Rs 60 lakh crore in 10 years.
Congress general secretary Randeep Surjewala claimed that India's federalism is under “unprecedented strain”.
In a post on X, he said states already carrying debt levels that have “tripled in a decade” and are now being stripped of their “fiscal independence” through the government's handling of GST compensation cess and “arbitrary” cen
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ngling States', eroding their 'independence', 'finishing their functionality', and reducing them to 'powerless municipalities'.
“This is not cooperative federalism. It is 'coercive federalism' that undermines democracy itself by 'unionising power' in the Centre and leaving States to collapse under debt and dependency,” the Congress general secretary said.
He said as “Coercive federalism” converts states into “glorified municipal committees”, there are 12 issues to ponder over.
Claiming that Rs 1,70,000 crore is collected every year from “cesses and surcharges”, he aid the Centre keeps it and states get nothing.
“If merged with GST, States would get their share. Today, they are denied.” Surjewala also said “Compensation Cess” was create
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s means States will lose the '41 percent devolution' guaranteed by the Finance Commission.
“Proposition is simple. Keep Cess but use it only to compensate States for the next decade. The Modi government dismisses this as “hogwash” and repeats the same false promise of “economic buoyancy”. Reality is Karnataka – State alone loses Rs 25,000 crore every year compared to the pre-GST regime,” he said.
With states losing revenue, he claimed that this is a “death-knell” for financial independence of states.
“They will be reduced to “glorified municipalities”, stripped of power and made dependent on crumbs from Delhi,” Surjewala claimed.
He also claimed that “Cooperative federalism” is being hollowed out and “Decentralisation of power” is being
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