The West Bengal authorities on Friday prompt to Union Finance Minister Nirmala Sitharaman that the borrowing limits of states be raised to five per cent of the gross state home product (GSDP) with none situation to save lots of them from a monetary disaster.
In a letter to Ms Sitharaman, state Finance Minister Dr Amit Mitra additionally expressed disappointment over the proposal of hefty GSTs on objects required to battle Covid-19 on the GST Council Assembly held on Might 28.
“You’re conscious that identical to final yr, there was (a) sudden dip in income, threatening the fiscal viability of the states. In our case we’ve been hit by a double whammy — of a second wave of Covid-19 and the Cyclone Yaas,” the letter learn.
The Items and Providers Tax (GST) compensation as a result of states from April 2020 to January 2021 has been estimated at Rs 63,000 crore, out of which West Bengal expects Rs 4,911 nominal gross state home product crore, Mr Mitra stated.
Referring to the Centre stress-free the borrowing restrict of states as much as 4 per cent (unconditional) and as much as 5 per cent (conditional on sure achievements), he stated, “However for the present monetary yr, annual borrowing restrict has been fastened at 4 per cent of GSDP, out of which solely 3.5 per cent is unconditional and 0.5 per cent is linked to capital expenditure targets.”
“In view of the current deadlock and the anticipated third wave (of the pandemic), I as soon as once more urge you to permit the borrowing limits of states to be raised to five% of GSDP with out situation,” the state finance minister stated.
Mr Mitra additionally urged Ms Sitaraman on revisiting the matter of the hole to be funded the place, he claimed, the borrowing could be Rs 2,13,000 crore as an alternative of the Centre’s estimated Rs 1,58,267 crore.
“I’m greatly surprised that after a yr like 2020-21, it’s being anticipated that our capital expenditure wouldn’t solely be again on monitor, however improve by greater than 100 per cent since 2019-20,” the letter learn.