The son of a migrant daily wage laborer looks out a bus window bus as he travels to his hometown following a lockdown amid concern over spread of coronavirus in New Delhi.(AP)
The son of a migrant daily wage laborer looks out a bus window bus as he travels to his hometown following a lockdown amid concern over spread of coronavirus in New Delhi.(AP)

Government may borrow Rs 40k crore as cash-strapped states seek funds

Several states have cited a funding crunch and announced salary cuts for their employees for March.
By HT Correspondent | Hindustan Times, New Delhi
UPDATED ON APR 03, 2020 06:30 AM IST

The government may borrow about Rs 40,000 crore to compensate cash-strapped states for their revenue shortfall under the Goods and Services Tax (GST) regime, and push its departments and public sector firms to clear their vendors’ dues , to rescue them from an acute liquidity crunch caused by the 21-day coronavirus lockdown, three officials aware of the developments said. Apart from states, government departments also owe money to companies across sectors for products bought, services rendered, or such things as subsidies.

Click here for the complete coverage of the Covid-19 pandemic

In a meeting with the Prime Minister Narendra Modi though video conference on Thursday, several state chief ministers demanded that the Centre pay their GST compensation, immediately release the wages of workers enrolled under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) and sought help in Coronavirus relief efforts. The government is considering their proposals, the three officials said.

The cabinet secretariat and the department of expenditure are continuously monitoring the situation so that the states do not face a funding crunch in fighting the coronavirus pandemic and companies, particularly micro, small and medium enterprise (MSME), receive their dues in time to tide over the crisis, the officials said on condition of anonymity.

Several states have cited a funding crunch and announced salary cuts for their employees for March.Industry, particularly the MSME sector, has asked for the speedy release of outstanding payments by government agencies.

“The expenditure secretary has told all ministries and CPSEs (central public sector enterprises) not to sit on vendors’ money and clear their dues expeditiously,” one of the officials with direct knowledge of the matter said.

An official in the West Bengal government said the Centre must pay the entire compensation amount due to the states at this crucial juncture to meet their Covid-19 expenses. Punjab has asked for the release of Rs 6,752.83 crore in GST arrears immediately; the payment has been pending since October , 2019.

A recent report on Covid-19 prepared by the Federation of Indian Chambers of Commerce and Industry (Ficci) also asked the Centre provide liquidity to states by increasing the overdraft facility available to them from the Reserve Bank of India (RBI) and pay pending GST compensation immediately.

Also Read: Hoarding, transport snags choke supply of essentials

According to the Union government officials mentioned above, the total compensation payout ito the states n 2019-20 is expected to be over Rs 1.20 lakh crore while total collection from GST compensation cess was less than Rs 80,000 crore. “The government will put up a proposal to the GST Council to borrow from the market to pay compensation to states,” the second official said.

The GST law assures the states a 14% increase in their revenue for five years and the Centre is committed to meeting any shortfall in revenue through the cess levied on luxury goods and sin products such as liquor, cigarettes and other tobacco products.

Most of the states asked the Centre to relax their borrowing limits,and demanded an additional grant in the aftermath of Covid-19 and advance wage payments to MGNREGS workers. Bihar chief minister Nitish Kumar requested the Union government to consider raising the fiscal deficit limit for the state to tide over the emergency. A similar demand also came from the Punjab and Rajasthan governments. The states’ current fiscal deficit limit stands at 3 % of Gross State Domestic Product (GSDP).

West Bengal has demanded a grant of Rs 25,000 crore to fight the Coronavirus disease pandemic, besides kits to fight the virus, such as face masks, gloves, sanitizers and protective suits for medical staff. It also demanded that the Centre release Rs 36,000 crore under different accounts that had not been released earlier.

“...to uphold the spirit of cooperative federalism, we need this minimum help from the central government to cope with the unprecedented impasse at this hour to fight against the Covid-19 pandemic,” chief minister Mamata Banerjee wrote to the Prime Minister on Wednesday. She did not take part in the video conference with PM Modi on Thursday.

Maharashtra chief minister Uddhav Thackeray sought the release of GST compensation worth Rs 16,000 crore. The state government also sought help with procurement and manufacturing of personal protective equipment (PPE) kits and N-95 masks, a government statement said.

Punjab also demanded payment of 15 days’ unemployment allowance per month for three months to mitigate rural distress on account of the national lockdown, suggesting a 90:10 centre-state sharing for these. It asked for a special insurance package for fronline workers such as the police and sanitary workers.

Rajasthan demanded Rs 1 lakh crore from the Centre to fight Covid-19. In a statement after the video conference with the PM, Rajasthan chief minister Ashok Gehlot said he had requested for a relief package and asked for an enhancement of the state’s borrowing limit.

Gehlot requested an inter-state supply chain protocol for essential items, medicines and medical equipment, advance payment of wages to registered and active MNREGS workers and demanded cancellation of payment of interest to the Reserve Bank of India (RBI) and other central financial institutions. Some CMs including Thackeray also demanded immediate distribution of Coronavirus safety equipment and testing kits.

Odisha chief minister Naveen Patnaik did not present any wish-list in the video conference with PM Modi, but he wrote to him earlier this week demanding unemployment allowance to 3.61 million active MGNREGS workers in the state for the lockdown period of 21 days. He requested the Centre to allow the state government to utilise Rs 380.39 crore from the MNREGS fund to provide the unemployment allowance for 21 days.

Chhattisgarh chief minister Bhupesh Baghel in a letter to PM Modi on Wednesday demanded the allocation of a special relief package for labourers under MGNREGS. He also requested a support of Rs 750 per month to all Jan-Dhan account holders for the next three months. Under a relief package announced last week, the government will pay Rs 500 a month for three months to women who hold Jan Dhan accounts.

The Union government has also received industry requests to release payments that are due to private sector units.

According to an industry estimate, the outstanding payments to companies run into lakhs of crores. The Associated Chambers of Commerce and Industry of India (Assocham) estimated payments owed by state distribution companies to power generation units at Rs 90,000 crore. In the delayed payments monitoring portal MSME Samadhaan, only 14% of the Rs 3,774.36 crore (against 11,619 claims) filed by MSMEs have been settled so far, it said.

Assocham president Niranjan Hiranandani said the payment delays had created a massive liquidity crunch in two ways: “One, government is taking over all the cheap borrowing in the system (though inadequate), and two, they do not release cash flow to vendors – so the liquidity crisis has exacerbated. MSMEs struggle to cover the financial shortfall created by delayed payments, owing to the high cost of borrowing and this often creates viability issues.”

SHARE THIS ARTICLE ON
Close
The opposition BJP has demanded a probe into each case of farmer suicide and compensation to the families of the deceased farmers(Representational Photo/Getty Images)
The opposition BJP has demanded a probe into each case of farmer suicide and compensation to the families of the deceased farmers(Representational Photo/Getty Images)

141 farmers died by suicide in last 10 months, says Chhattigarh government

PUBLISHED ON FEB 27, 2021 11:48 AM IST
  • The government's statement came in response to a question by the leader of opposition in the assembly about the number of farmers who died by suicide.
Close
HT Image
HT Image

Must try to use less plastic in toys: PM Modi

By hindustantimes.com, Hindustan Times, New Delhi
UPDATED ON FEB 27, 2021 11:48 AM IST
Close
Prime Minister Narendra Modi delivers the inaugural address at the second 'Khelo India National Winter Games' on Friday.(ANI Photo)
Prime Minister Narendra Modi delivers the inaugural address at the second 'Khelo India National Winter Games' on Friday.(ANI Photo)

PM Modi inaugurates the India Toy Fair

By hindustantimes.com, New Delhi
UPDATED ON FEB 27, 2021 11:42 AM IST
  • PM Modi inaugurated the event via video conferencing.
Close
Agri Gold set up more than 150 companies and started collecting deposits from the public with a promise of providing developed plots and farm lands or returning money at a high rate of return on maturity or pre-term. (HT Photo)
Agri Gold set up more than 150 companies and started collecting deposits from the public with a promise of providing developed plots and farm lands or returning money at a high rate of return on maturity or pre-term. (HT Photo)

Odisha court orders attachment and auction of properties of chit fund firm

By Debabrata Mohanty, Hindustan Times, Bhubaneswar
PUBLISHED ON FEB 27, 2021 10:32 AM IST
The group is among 44 chit fund companies facing a Central Bureau of Investigation probe since May 2014 for raising around 578 crore from people without listing itself in the stock exchange.
Close
Ahead of the second phase of the vaccination drive from March 14,242,547 people have been inoculated against the coronavirus disease so far.(Reuters Photo)
Ahead of the second phase of the vaccination drive from March 14,242,547 people have been inoculated against the coronavirus disease so far.(Reuters Photo)

India reports 16,488 Covid-19 cases, 113 deaths; tally over 11.07 million

By hindustantimes.com | Written by Meenakshi Ray, New Delhi
UPDATED ON FEB 27, 2021 10:17 AM IST
With 12,771 patients of the coronavirus disease recovering between Friday and Saturday morning, India’s recovery tally has gone up to over 10.76 million and the national recovery rate is 97.14%, data showed.
Close
Pakistan's Prime Minister Imran Khan looks on during a Trade and Investments conference in Colombo on February 24, 2021 on the second day of Khan's official visit to Sri Lanka. (Photo by Ishara S. KODIKARA / AFP)(AFP)
Pakistan's Prime Minister Imran Khan looks on during a Trade and Investments conference in Colombo on February 24, 2021 on the second day of Khan's official visit to Sri Lanka. (Photo by Ishara S. KODIKARA / AFP)(AFP)

Imran Khan says onus on India for progress after LoC ceasefire agreement

By Rezaul H Laskar, Hindustan Times, Delhi
UPDATED ON FEB 27, 2021 11:11 AM IST
Pakistan is ready to move forward to resolve “all outstanding issues through dialogue”, said Imran Khan.
Close
Healthcare workers arrive to screen passengers at the CSMT railway station, owing to surge in Covid-19 cases in Mumbai, on Friday.(PTI Photo)
Healthcare workers arrive to screen passengers at the CSMT railway station, owing to surge in Covid-19 cases in Mumbai, on Friday.(PTI Photo)

New variants, negligence among reasons for fresh Covid-19 spread, say experts

By hindustantimes.com | Edited by Amit Chaturvedi
UPDATED ON FEB 27, 2021 11:15 AM IST
From dip in testing number to negligence shown by people, experts list the main reasons why the coronavirus disease (Covid-19) pandemic has been rising after a fall in recent months.
Close
Representative Image (HT File)
Representative Image (HT File)

Covid-19 surge in Maharashtra, Kerala: How each state fared in last 5 days

By hindustantimes.com | Written by Karan Manral, New Delhi
UPDATED ON FEB 27, 2021 09:53 AM IST
Maharashtra and Kerala have led the recent resurgence of the Covid-19 pandemic in India. The Centre has expressed concern at the rise in cases in Chhattisgarh, Punjab and Madhya Pradesh as well.
Close
A BMC health worker collects swab sample of a construction worker for Covid-19 test, at Siddhivinayak Metro site in Mumbai on February 25. (PTI File Photo )
A BMC health worker collects swab sample of a construction worker for Covid-19 test, at Siddhivinayak Metro site in Mumbai on February 25. (PTI File Photo )

Covid-19 guidelines extended till March 31, states told to maintain caution

By hindustantimes.com | Written by Kanishka Sarkar, Hindustan Times, New Delhi
PUBLISHED ON FEB 27, 2021 09:33 AM IST
The ministry has also advised states and Union territories to step up the pace of vaccination of the target population against the viral disease in order to break the chain of transmission.
Close
The Committee to Protect Journalists and other press freedom activists hold a candlelight vigil in front of the Saudi Embassy on, October 2, 2019. (Reuters File Photo)
The Committee to Protect Journalists and other press freedom activists hold a candlelight vigil in front of the Saudi Embassy on, October 2, 2019. (Reuters File Photo)

News updates from HT: After Khashoggi report, US sanctions against 76 Saudis

By hindustantimes.com, Hindustan Times, New Delhi
PUBLISHED ON FEB 27, 2021 09:05 AM IST
  • Here are today’s top news, analysis, and opinion. Know all about the latest news and other news updates from Hindustan Times.
Close
Representative Image
Representative Image

LIVE: 215,435,383 samples tested for Covid-19 till February 26, says ICMR

UPDATED ON FEB 27, 2021 11:37 AM IST
The global tally of Covid-19 cases is at over 113 million while the related death toll is in excess of 2.5 million, according to the Johns Hopkins University tracker.
Prime Minister Narendra Modi delivers the inaugural address at the second 'Khelo India National Winter Games' on Friday.(ANI Photo)
Prime Minister Narendra Modi delivers the inaugural address at the second 'Khelo India National Winter Games' on Friday.(ANI Photo)

PM Modi to inaugurate toy fair today, govt says bid to make India global hub

By hindustantimes.com | Edited by Amit Chaturvedi
PUBLISHED ON FEB 27, 2021 07:24 AM IST
In his 'Mann Ki Baat' address in August last year, the Prime Minister had emphasised boosting toy manufacturing in India.
Close
Demonstrators at Ghazipur border as the farmers' protest against new farm laws continues, in New Delhi. (Sakib Ali /Hindustan Times)
Demonstrators at Ghazipur border as the farmers' protest against new farm laws continues, in New Delhi. (Sakib Ali /Hindustan Times)

Farm laws protest LIVE: UN asks India to find 'equitable solution' to protests

By hindustantimes.com, Hindustan Times, New Delhi
UPDATED ON FEB 27, 2021 10:14 AM IST
  • Farm laws protests enter Day 92. Bachelet-Indra Mani Pandey debate over agitation at UN.
Farmers raise slogans during a protest against the new farm laws, at the Delhi-Ghazipur border in New Delhi on Thursday. (ANI Photo)
Farmers raise slogans during a protest against the new farm laws, at the Delhi-Ghazipur border in New Delhi on Thursday. (ANI Photo)

Showed utmost respect to protesting farmers, engaged in dialogue: India at UNHRC

ANI, Geneva [switzerland]
PUBLISHED ON FEB 27, 2021 07:17 AM IST
Ambassador Indra Mani Pandey, Permanent Representative of India, said that the India has set a goal of doubling the income of farmers by 2024.
Close
Analysts say that the F-16 incident may have well forced the Indian Air Force to acquire the Meteor missile for Rafale. (Vipin Kumar/HT Photo)
Analysts say that the F-16 incident may have well forced the Indian Air Force to acquire the Meteor missile for Rafale. (Vipin Kumar/HT Photo)

Pak went back on its F-16 promise to US. How India fixed the gaps with Rafale

By Shishir Gupta, New Delhi
PUBLISHED ON FEB 27, 2021 06:52 AM IST
Paris hasn’t just assured India that Rafale technology, specially that related to the Meteor air-to-air missile will be kept out of reach of Pakistan, but also that it will no longer upgrade the Mirage 3/5 fighters or Augusta 90 B submarines in Islamabad’s military inventory.
Close
SHARE
Story Saved
OPEN APP