BackChorus grows from states for more financial aid to combat virus
Captain Amarinder Singh sent a letter to PM Modi seeking special financial assistance and grant for FY21Singh suggested a three-pronged strategy to bail out states, including a three-month financial bailout package
PremiumMore and more states are demanding greater financial assistance from the Centre to help them fight covid-19. On Tuesday, two chief ministers—Captain Amarinder Singh of Punjab and Bhupesh Baghel of Chhattisgarh, wrote to Prime Minister Narendra Modi seeking special financial assistance and revenue grant for FY 2020-21.
Non-Bharatiya Janata Party-ruled states including Kerala have been demanding more financial help and payment of their GST dues. Chief ministers of some states had raised the issue of resource crunch with Modi in a video conference days before the extension of national lockdown. In his letter to Modi on Tuesday, Singh suggested a three-pronged strategy to bail out states, including a three-month special financial package and extension of the 15th Finance Commission till October 2021 for submission of its final report.
“With the states continuing to shoulder their committed liabilities and facing new demands on relief, health infrastructure expenditure etc, it is only fair and just that the 15th Finance Commission should be requested to recommend a Special covid-19 Revenue Grant for the year 2020-21," The Punjab chief minister said in the letter to Modi, according to a press release issued by his office.
He also requested Modi to take “a decision on the proposed course of action expeditiously" and added that a package by the Centre should give states maximum flexibility to design, implement and execute it as per local needs.
Singh also wrote to union home minister Amit Shah earlier on Tuesday asking for expediting the release of the state’s GST arrears of ₹4,400 crore for the last four months, to help it overcome resource constraint. He also sought an interim compensation of ₹3,000 crore for April and demanded permission for sale of liquor to mobilise excise revenue.
Earlier this month, Kerala finance minister Thomas Issac had urged the union government to allow more borrowing by the states. He also said that the funds released by the Centre were not enough to deal with the pandemic.
Similarly the All India Anna Dravida Munnetra Kazhagam (AIADMK) government in Tamil Nadu had sought release of ₹9,000 crore grant by the Centre to combat the pandemic.
On Tuesday, apart from Punjab, another Congress- ruled state Chhattisgarh too brought up the issue of fund crunch. Baghel in a letter to Modi sought assistance of ₹30,000 crore over the next three months for relief measures and welfare schemes, out of which ₹10,000 crore, he suggested, could be released immediately.
Flagging the issue of low funds, Delhi’s deputy chief minister Manish Sisodia had written to union finance minister Nirmala Sitharaman earlier this month saying that when the Centre made available disaster funding to states, Delhi did not get anything.
States are facing a fund crunch as tax collections have dropped due to the slowdown in economic growth as well as the suspension of economic activities by companies on account of the lockdown.
anuja@livemint.com
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