Citing financial problems amid the coronavirus-induced lockdown, Chief Minister Bhupesh Baghel has requested Prime Minister Narendra Modi that the credit limit for Chhattisgarh this year should be relaxed to 6% and its fiscal deficit should be kept at 5% of the GSDP.
In a letter to the Prime Minister, Baghel said this would be needed to provide relief to the distressed people in the state and to help Chhattisgarh arrange for more financial resources to conduct official and development works.
Baghel pointed out that due to the effective way the nationwide lockdown was implemented in the state from March 22 to arrest the spread of Covid-19 pandemic, all economic activities across the country including in Chhattisgarh were stopped, causing revenue loss to the state.
The complete lockdown has mostly affected the financially weaker sections including daily wagers, labourers, small shopkeepers and most rural families.
This is also the time to reap the crops. Farmers are selling the crops to make both their ends meet. As this section of the society forms a major part of Chhattisgarh’s population, it is difficult for the state to take appropriate social and financial measures to provide them relief without the Central government’s intervention.
Baghel stated in the letter that all the departments of the state have been allotted budget for fiscal 2020-21. Financial resources are required for expenditures related to basic needs.
The Union Finance Ministry has approved 50% of the net credit limit, i.e. Rs 5,375 crores, to Chhattisgarh to take market loans in the first nine months of this financial year. This, the Chief Minister said, is insufficient for the expenses in the current situation.
As a significant decline in revenue collection is expected this year, the state requires relaxation in the net credit limit and the fiscal deficit limit (3% of GSDP) under the provisions of Fiscal Responsibility and Budget Management Act.
He pointed out that Chhattisgarh has been strictly following financial discipline since the day of its formation. Even at present, it has the least loan pressure (19.2% of GSDP) and least interest payable (7.4% of total revenue collection).
The Chief Minister told the Prime Minister that during an emergency or disaster, extraordinary measures are required. Hence, the state should be given relaxation in credit limit up to 6% of the GSDP. Also, it should be allowed to keep the fiscal deficit up to 5% of the GSDP.
Other than the expenditure control being done in the state through various measures, these relaxations by the Central government would bring great relief to Chhattisgarh during this difficult time caused by the coronavirus pandemic.
Baghel expressed hope that the Central government would consider these genuine demands on a compassionate note.