Relax Chhattisgarh net loans, fiscal deficit limits under FRBM Act, Chhattisgarh CM Baghel tells PM
NEW DELHI: The Chhattisgarh government on Friday sought a relaxation from the government in the state’s borrowing limit and said it should be raised to 6% of GSDP this year.
In light of the fiscal duress being faced by the state government due to the coronavirus pandemic and the impact of the extended lockdown on economic , chief minister said the state’s fiscal deficit should be fixed at 5% of GSDP as an exception to allow it to raise more economic resources for development activities, including providing relief to people who need it.
In a letter to Prime Minister Modi, Baghel said that all economic activities have stalled since March 22 to prevent the spread of the coronavirus, and the shutdown not only resulted in a loss of revenue for the state, but also hurt economically weaker sections and farm community.
Baghel said the consent of the Union Finance Ministry to borrow Rs 5375 crore from the market, equivalent to 50% of the state's net loan limit during the first 9 months of the current tax, is not enough to cover expenses during this period. Since revenues are expected to decline, a relaxation is needed on the state's net debt limit and the fiscal deficit limit under the FRBM Act, he said.
The CM also emphasized Chhattisgarh's fiscal record and its lowest debt burden, 19.2% percent of the GSDP, reportedly the lowest in the country, to assert that the Center must accommodate Chhatisgarh's requests.