Mumbai (Maharashtra) [India], April 26 (ANI): NCP chief Sharad Pawar has written to Prime Minister Narendra Modi and Union Finance Minister Nirmala Sitharaman, seeking a 'generous financial package' from the Centre for Maharashtra to overcome the crisis caused in the State due to COVID-19 crisis.
Drawing the attention of Modi and Sitharaman to economic indicators and strategy to overcome the crisis faced by Maharashtra, Pawar in the letter dated April 25 has suggested the Centre should extend the National Small Savings Fund Loan (NSSF) repayment by two years and additional grants of Rs 1 lakh crore should be given to the State for the FY 2020-21.
"So far Mumbai is the hardest-hit city in the COVID-19 outbreak and the prolonged lockdown conditions. It has severely impacted the economy of Maharashtra and may have detrimental consequences on Indian economy if not addressed urgently," Pawar stated in the letter.
He outlined that as per the present borrowing limits at 3 per cent of GSDP, the State can borrow up to Rs 92,000 crore, out of which Rs 54,000 crore has been planned for meeting the capital expenditure requirements for the financial year 20-21, which clears that the Sate is going to "face a shortfall of Rs 1,00,000 crore" to sustain projected expenditure.
Listing some strategies in the letter, he said: "One strategy is to enhance the Fiscal Responsibility and Budget Management (FRBM) borrowing limit and borrow more. However, covering the entire shortfall only through the borrowing will push the State towards a potential debt trap."
"The other strategy could be to cut public spending. However that would be counterproductive in view of the subdued economy," he said.
He also gave examples of the US, Spain, Germany, France, and Australia, who have released financial packages of around 10 per cent of GDP.
"Almost all countries the US, Spain, Germany, France, Australia, etc., have released financial packages of around 10 per cent of GDP. Thus, the room can be created by the Government of India along with the RBI for giving suitable financial package to States," wrote Pawar.
"In the eventual recovery of the Indian economy, the States will play a major role and if left out without any help, the States will not be in a position to supplement the required national government efforts," Pawar said. (ANI)