Chhattisgarh: Chief Minister of Chhattisgarh, Bhupesh Baghel wrote a letter to Union Finance Minister Nirmala Sitharaman, requesting her to reconsider the Centre’s decision to link the increased borrowing limit of states to specific reforms and allow the states to enhance their resources during the Covid-19 crisis without any conditions.
In the letter, the chief minister said that the states are unable to avail the benefits of additional borrowing limit of 2 percent of Gross State Domestic Product (GSDP) provided by the centre due to non-fulfillment of conditions and norms. He demanded that states be allowed to avail the additional borrowing limit of 2 per cent without any conditions.
The Centre has allowed the states to increase their borrowing limit from 3% of the GSDP to 5% on fulfillment of certain conditions.
Current situation that rose due to pandemic demands for immediate and primary resources for public welfare and for that the governments must be given a free hand to look out for the people of their particular state.
CM said “the problem of scarcity of resource remains unchanged for the states and the responsibility of the state government has increased even more as economic packages announced by the Centre to deal with the anomalous situation arising due to the Corona crisis and nationwide lockdown are also insufficient to revive the economy and meet the needs of the common people.”
He further pointed that “the automation of fair price shops including installation of POS machines in remote and forest areas is a difficult target for the state to achieve as 14 districts of Chhattisgarh are affected by Left Wing Extremism (LWE) activities. “
“Similarly, there are many technical hurdles in implementing the Direct Benefit Transfer (DBT) system by ending the power subsidy being given to farmers in the agrarian state”, he added.
Even though the Centre has accepted the states’ demand for an increased borrowing limit of 5% against 3% for the current financial year, it has put conditions on the states to avail the higher borrowing limit. While the states can borrow up to 3.5%, or around Rs 7.5 lakh crore without any condition, the next 150 bps of the borrowing limit comes with conditions.
The chief minister said that although these reforms are quite important, but it is not an appropriate time for these changes.