With the State Government expected to go in for larger borrowings, the Union Ministry of Finance has asked it to address the issue with the Department of Expenditure with justification.
During the current year, the Centre will keep these matters under review and decisions will be taken in due course once greater clarity is achieved on prevailing situation, officials say.
There is adverse impact on revenue generation as trade, industry, mining and business have come to a halt due to COVID-19 lockdown. So generation of revenue will be hard hit in April.
Now, lockdown has been extended till April 30 by the Odisha Government and the generation of revenue will face an uphill task. So the State has left with no option but go for more market borrowings.
Union Finance Minister Nirmala Sitharaman has said she is aware about the pressures being faced by the States. Accordingly she has allowed an additional special borrowing permission for all States amounting Rs 58,844 crore.
Sitharaman has said in case the State Government wish to have a greater percentage of the annual borrowing ceiling to be approved now itself, they are needed to raise the issue with the Department of Expenditure accordingly.
In her letter to Chief Minister Naveen Patnaik, she said that the Union Government will support the State Government in this hour of difficulty, notwithstanding severe constraints on the Union Government finances.
Earlier, 50 per cent of the borrowing ceiling for 2020-21 had been authorised to the State Government.
The Centre provides grants under various heads, including devolution, Goods and Services Tax compensation, various grants and the financial packages which the States have been demanding in view of COVID-19.
The Prime Minister has also announced Pradhan Mantri Garib Kalyan Yojana for Rs 1.70 lakh crore to mitigate hardship of the affected people.
The Union Government has in the meantime released first instalment of State Disaster Response Fund (SDRF) and Revenue Deficit Grant as recommended by the Fifteenth Finance Commission (FFC).
The Reserve Bank of India (RBI) has also enhanced Ways and Means Limits for the States by 30 per cent on April 1, 2020.
The Ministry of Finance has also flagged issues of further relaxation of Ways and Means Advance and Overdraft facilities with RBI and these are under consideration, said sources.