Jharkhand's Planning-cum-Finance and Food and Civic Supplies Minister and Jharkhand State Congress Committee (JPCC) Chief Rameshwar Oraon, on Monday, said the State has to spend more to deal with this global epidemic, while the revenue collection has come down due to the lockdown, the states will have to borrow more. He also praised the State’s performance in fight against COVID-19.
Oraon said that the permission was sought to increase the mandatory fiscal deficit under the FRBM at the rate 3 to 5 per cent of the state's GSDP by some states including Kerala and Telangana, which the Union Finance Minister, in a media address on Sunday informed that she permitted the states to increase mandatory fiscal deficit.
"This is only the permission of the Center, it will not bring any financial burden on the Center, but when the Central Government talks about reforms, then the most improvement should have been that had the Center would raise its borrowing limit and with that borrowing, it further lends to states, it would have been a big reform. Because the cost of borrowing of the states is high, that is, they have to raise money at higher interest rates, which increases their liability more, while the Center gets the loan at very low rates and with this loan the states get the money in the form of debt.
Then the states would be charged about two per cent less interest.
This would have increased the fiscal deficit of the Center, but what really matters is not the combined fiscal deficit and the burden of interest on the states. In April, Kerala has had to raise debt at 8.96 per cent and Nagaland at 8 per cent, which is a huge burden on the states, and the states are also grappling with the problem of reduction in revenue collection during the crisis," said Oraon.
The JPCC Chief said that Jharkhand has also stood in the struggle with the Government of India to prevent the infection of Corona virus.
"In light of the instructions given for lockdown four, there is a need for restriction in Jharkhand as the migrant laborers continue to come here.
They have to follow the tule of social distancing patiently because they are coming from infected areas. It is difficult to get a lot of exemption, but like in the past, work will continue in the areas of brick manufacturing industry, MNREGA, agriculture sector to create employment opportunities in rural areas," he added.