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Chief Ministers will take up with PM today: Shortage of funds to next steps

https://indianexpress.com/article/coronavirus/chief-ministers-will-take-up-with-pm-today-shortage-of-funds-to-next-steps-6342957/

Written by
P Vaidyanathan Iyer
| New Delhi |

Updated: April 2, 2020 8:50:17 am

india states narendra modi, indian economy, india lockdown, india states losses coronavirus lockdown, coronavirus covid 19, india news, indian expressindia states narendra modi, indian economy, india lockdown, india states losses coronavirus lockdown, coronavirus covid 19, india news, indian express People line up outside a PDS outlet in the Behrampur area of Ahmedabad on Wednesday as the Gujarat government began distributing free rations. (Express photo by Javed Raja)

A WEEK INTO the lockdown, and faced with an extraordinary situation of large-scale migrant worker movement, several states, including Maharashtra, Punjab, Rajasthan, and West Bengal, are scrambling to find funds to undertake even basic relief measures for the most vulnerable sections of their people.

While most states have written letters to Prime Minister Narendra Modi asking that the Centre clear their pending dues, they are likely to press these demands at a video conference he has scheduled on Thursday. “In the last meeting, while all CMs were present, only eight were invited to speak. This time around, several CMs would want to tell the Prime Minister about the acute economic distress in their respective states,” said a senior state government official, who did not wish to be quoted.

Some state chief ministers have already noted that the announcement of a 21-day lockdown was made without taking them into confidence. With the responsibility of providing relief for migrant workers lying squarely on the shoulders of states, inadequate financial support is only widening the trust deficit with the Centre, some of the officials told The Indian Express.

An official in the Chief Minister’s Office of one of the states said the Union Ministry of Home Affairs had last week authorised them to utilise money available under the SDRF (State Disaster Response Fund) for setting up relief measures. “But for many states, the SDRF is just a book entry. Money is fungible. With huge bills pending at the Centre’s doorsteps, most states have utilised money parked under different heads,” the official said.

Chief Ministers will take up with PM today: Shortage of funds to next stepsChief Ministers will take up with PM today: Shortage of funds to next steps The shepherd at empty Okhla Barrage road during the lockdown due to coronavirus on Wednesday. (Express Photo by Gajendra Yadav)

“Maharashtra has recently written a letter to the Government of India, seeking immediate release of Rs 25,000 crore, which includes Rs 18,000 crore towards GST compensation. Scarcity of funds is affecting relief measures of states, especially since the relief announced by the Centre is woefully inadequate,” said a state official.

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Another funding source the Centre had asked states to tap into was the Building and Other Construction Workers welfare cess. Announcing the relief package on March 26, the Union Finance Ministry said the collective corpus under this head available with all states stood at Rs 31,000 crore. State government officials, however, said this amount was only for registered construction workers, many of whom had left for their hometowns.

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Further, the official said, most states have not yet started disbursements of money from the welfare funds. “We are trying to ascertain if those registered are indeed construction workers. In the past, funds have been disbursed ahead of elections by these politician-run welfare boards to their vote banks,” said the official.

Security tightened as Worli Koliwada and Adarsh Nagar, Prabhadevi remains sealed. (Express photo by Nirmal Harindran)

A third official who advises the Chief Minister of a northern state said many states are forced to undertake measures they never did in the past. “For example, Odisha, Andhra Pradesh and Rajasthan have deferred or cut salaries. This is denying a contractual obligation to our employees,” said the official.

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For many states, revenues from sales tax, excise, have dried up, but expenditures have only ballooned over the last three weeks. Given the pre-existing fiscal stress, states have less money in bank accounts. “Mitigating economic stress will be the biggest issue in tomorrow’s meeting,” said the official who advises the Chief Minister on financial aspects.

Here’s a quick Coronavirus guide from Express Explained to keep you updated: What can cause a COVID-19 patient to relapse after recovery? | COVID-19 lockdown has cleaned up the air, but this may not be good news. Here’s why | Can alternative medicine work against the coronavirus? | A five-minute test for COVID-19 has been readied, India may get it too | How India is building up defence during lockdown | Why only a fraction of those with coronavirus suffer acutely | How do healthcare workers protect themselves from getting infected? | What does it take to set up isolation wards?

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