Chhattisgarh Chief Minister Bhupesh Baghel has requested Prime Minister Narendra Modi to relax the credit limit for the state to 6 per cent as it is facing financial problems due to lockdown in place to curb the spread of coronavirus.
In a letter to the prime minister, the Chhattisgarh CM also asked that the fiscal deficit of the state be kept at 5 per cent of the Gross State Domestic Producgt (GSDP) to help it arrange for more financial resources to conduct official and development works.
Baghel said that due to the effective implementation of the lockdown in the state from March 22 March, all economic activities across the country including Chhattisgarh have been stopped, which has caused revenue loss to the state.
“Complete lockdown has mostly affected the financially weaker section of the society, which includes daily wagers, labourers, small shopkeepers and most rural families. It is also the time for harvesting crops. Hence, farmers are harvesting crops and selling it to make both ends meet. As this section of society constitutes major part of the Chhattisgarh’s population, it is difficult for the state to take appropriate social and financial measures to bring relief to them, without the central government’s intervention,” the chief minister’s letter stated.
The CM further stated that all the state departments have been allotted budget for fiscal year 2020-21 and financial resources are required for expenditures related to basic requirements.
{{/usCountry}}The CM further stated that all the state departments have been allotted budget for fiscal year 2020-21 and financial resources are required for expenditures related to basic requirements.
{{/usCountry}}“Government of India’s Finance Ministry has approved 50% of the net credit limit which is Rs 5,375 crores to the state for taking market loans in the first nine months of this financial year. This is insufficient for the expenses in the current situation,” the letter stated.
The CM in his letter claimed that as a significant decline is expected in the state’s revenue collection this year, it requires relaxation in the net credit limit and the fiscal deficit limit (3% of GSDP) for the state under the provisions of Fiscal Responsibility and Budget Management Act. Chhattisgarh state has been strictly following financial discipline since the day of formation, and even at present, Chhattisgarh has the least loan pressure (19.2% of GSDP) and least interest payable (7.4% of total revenue collection).
“During emergency or disaster, extraordinary measures are required. Hence, the state should be given relaxation in credit limit upto 6% of the GSDP. Also, state should be allowed to keep the fiscal deficit upto 5% of the GSDP. Other than the expense control being done in the state through various measures, these relaxations by Central Government would bring great relief to the state during this difficult time of pandemic. I hope that Central Government would consider these genuine demands of the state on a compassionate note, keeping in view the difficulties being faced by Chhattisgarh and the entire country because of this pandemic,” the chief minister’s letter stated.
Chhattisgarh has so far reported 76 cases of Covid-19. Out of these, there are 40 active cases while 36 patients have been cured, according to the Union health ministry’s latest figures released on Friday.