COVID-19: Pawar writes to PM, seeks financial aid for Maha
In the letter, also addressed to Finance MinisterNirmala Sitharaman, Pawar pointed out that due to the COVID-19outbreak and the lockdown, Maharashtra would face a shortfallof Rs 1 lakh crore to sustain the projected expenditure, andurged the Centre to release additional grants of that amountto the state.
"The revenue receipts projected in the 2020-2021Maharashtra Budget are about Rs 3,47,000 crore and theeconomic activity is not likely to pick up much in the shortterm and may improve slightly in the medium term," he said inthe letter.
"Accordingly, as per the revised estimates, theexpected revenue shortfall would be Rs 1,40,000 crore. This isaround 40 per cent of the expected revenue and will leave ahuge hole in the state's finances," he added.
The former Union minister, whose party is part of theUddhav Thackeray-led MVA government in the state, claimed thatas per the current borrowing limit, which is three per cent ofthe GSDP, the state can borrow up to Rs 92,000 crore, of whichRs 54,000 crore have been planned for meeting the capitalexpenditure requirements for the financial year 2020-21.
"So, it is clear that the state is going to face ashortfall of Rs 1,00,000 crore to sustain the projectedexpenditure," he said.
Pawar said thatcovering the entire shortfall onlythrough borrowing will push the state towards a potential debttrap.
"The other strategy could be to cut public spending.However, that would be counterproductive in view of thesubdued economy. The state makes a repayment of Rs 10,500crore every year on account of the NSSF loan given byGovernment of India," he said.
"It is requested to extend two-year moratorium on loanrepayment. Further, it is imperative that in these testingtimes the Government of India should offer suitable financialassistance to states also," he said.
"The state requests additional grants of untied natureto the tune of Rs 1 lakh crore for the FY 2020-21," he said.
He also cited the examples of the United States ofAmerica, Spain, Germany, France, Australia etc, whichhavereleased financial packages of around 10 per cent of the GDP.
"Furtherroom can be created by the Centre along withthe RBI for giving suitable financial package to states," hesaid.
He listed out industries such as aviation, transport,tourism, hospitality, brick and mortar retail, entertainment,media and the wellness industry, saying it has been hit veryharddue to outbreak of novel coronavirus.
"They will have to be re-skilled for alternativeemployment and alternative businesses will have to be activelypromoted," he said while calling for online and internet-basedbusiness culture.
Pawar said that India should move fast and take stepsto capture the space likely to be released by Chinain themanufacturing sector.
"All the nations have realised the need for a morediverse supply chain in order to have reliability insupplies," he said.