Chief Minister Mr. Baghel writes letter to Prime Minister, requesting to keep credit limit 6 percent and fiscal deficit 5 percent of the GSDP2 min read
Chief Minister Mr. Bhupesh Baghel has written letter to Prime Minister Mr. Narendra Modi, stating the financial problems being faced by the state during lockdown. He requested that this year the credit limit for the state should be relaxed to 6% and fiscal deficit of the state should be kept 5% of the GSDP, as a relief to distressed people in the state and to help the state arrange for more financial resources to conduct official and development works.
Chief Minister stated in the letter to Prime Minister that due to the effective step of nationwide lockdown implemented in the state from 22 March 2020 for prevention of COVID-19 pandemic, all the 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 of reaping crops. Hence, farmers are reaping crops and selling it to make their 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 Central Government’s intervention.
Mr. Baghel stated in the letter that all the departments of the state have been allotted budget for fiscal year 2020-21. And financial resources are required for expenditures related to basic requirements. Government of India’s Finance Ministry has approved 50% of the net credit limit i.e. Rs 5375 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. As significant decline in revenue collection of the state is expected this year, the state 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)
Chief Minister stated in the letter to Prime Minister that 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. Chief Minister expressed 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.