Opposition-ruled states fear financial emergency amid Covid-19 lockdown

The opposition figures were participating in a webinar hosted by the Thiruvananthapuram-based Gulati Institute for Finance and Taxation (GIFT)

Finance ministers of opposition- ruled states and senior leaders of opposition parties said on Monday that they feared the country was moving towards a financial emergency amid the coronavirus disease pandemic (Covid-19) and accused the Centre of failing to address their mounting troubles.

Participants in the webinar demanded that the Centre take an immediate loan from the Reserve Bank of India and transfer the money to the states to help them tide over the coronavirus crisis.(Aalok Soni/ HT file photo. Representative image)

The opposition figures were participating in a webinar hosted by the Thiruvananthapuram-based Gulati Institute for Finance and Taxation (GIFT)

Participants in the webinar demanded that the Centre take an immediate loan from the Reserve Bank of India and transfer the money to the states to help them tide over the coronavirus crisis. If the situation is allowed to worsen and people begin to suspect that the country is headed for a financial emergency, they can’t be blamed, the participants said.

With their revenues falling by up to 80% during the Covid-19 lockdown that came into effect on March 25, several states have informed the Centre that they are almost broke and can’t even afford to pay salaries unless they borrow heavily and receive interim compensation from the Centre, Hindustan Times reported on Monday.

“There is an undeclared emergency in the country. The country is going through a difficult situation and the economy is in the doldrums. We don’t want mere slogans now. The Centre is yet to come up with a concrete plan to revive the economy,” said senior Congress leader Jairam Ramesh.

Participants in the webinar urged all states to come together and fight what they called “unilateral decisions” being taken by the central government. Despite a dire situation, Union finance minister Nirmala Sitharaman is yet to call a meeting of state finance ministers at a time when the states are confronting a a major fiscal crisis, they said.

Kerala finance minister Thomas Issac, who took the initiative in arranging the webinar, accused the Centre of discriminating against the states even in the midst of the pandemic. As an example, he cited the fact that company contributions to the newly launched PM-CARES fund were counted as corporate social responsibility spending, but not donations made to the Chief Minister’s Relief Fund in the states.

“We have been asking for the state FMs’ meeting for quite some time. But it is yet to take place. We have been hearing only monologues. We don’t need mere self-praise or kudos. We need ...money to tide over the crisis,” said Issac.

Delhi’s deputy chief minister Manish Sisodia, Punjab finance minister Manpreet Singh Badal, former Jammu and Kashmir finance minister Haseeb Drabu, Communist Party of India (Marxist) general secretary Sitaram Yechury, and Communist Party of India secretary D Raja attended the webinar.

“Delhi is in dire straits. If the situation continues like this, even the health sector will also be affected. Being a consumerist state, we are suffering heavily due to loss of economic activities. We need immediate help,” said Sisodia.

Badal said Rs 1,000 crore was due to be paid to by the Centre as its share of the Goods and Services Tax , but the Centre was not willing to part with the amount.