With revenues depleting, Congress govts flag the need to lift lockdown

Chhattisgarh Chief Minister Bhupesh Baghel, in a letter to the prime minister, demanded immediate permission to allow a host of economic activities

Faced with dwindling revenues and no significant financial assistance forthcoming from the Centre, the Congress-ruled states of Rajasthan, Chhattisgarh, and Punjab on Tuesday demanded that the Centre should start planning an exit strategy from the lockdown.
 

Chhattisgarh Chief Minister Bhupesh Baghel, in a letter to Prime Minister Narendra Modi, demanded immediate permission to allow a host of economic activities as the state is left with little revenue to take care of its poor.
 

Rajasthan’s Ashok Gehlot said it was time inter-state transit of migrant workers was allowed, and termed it “unfortunate” that the Centre does not empathise with this demand by the states. He said it was also about time the PM announced a plan for a staggered exit from the lockdown on May 3, else “a delay could force upon us another extension”.

At a meeting of the state’s sub-committee on finance, Punjab Chief Minister Amarinder Singh “stressed the need for an exit strategy, pointing out that the state could not be kept under lockdown indefinitely”.
 

With the state’s revenues depleting, Singh announced several measures to cut expenditure of government departments, and approved budgetary cuts worth Rs 1,625.87 crore.

In a letter to the PM, Singh suggested to the Centre a three-pronged bailout strategy for the states, including a three-month special financial package and extension of the 15th Finance Commission till October 2021 for submission of its final report so that it can make a more realistic assessment of the likely growth of the economy over the next five years.
 

The Congress chief ministers’ statements and decisions come in the wake of Congress leader Rahul Gandhi cautioning against the economic “blowback” of the lockdown, but also bemoaning the Centre’s “one-size-fit-all lockdown” strategy.
 

In a letter to the PM, Chhattisgarh’s Baghel pointed out that his state has largely escaped the scourge of coronavirus, but revenue collections “have come down to almost zero”.

Baghel sought Rs 10,000-crore immediate assistance from the Centre. Baghel also sought approval to start economic activities other than those relaxed from April 20. He said sweets shops, showrooms selling motor vehicles, ACs, coolers and refrigerators should be allowed, as also registration and purchase of properties, construction works in urban areas, repair work, and retail trade in green zones.

Punjab said it was struggling to meet the Covid-19 costs in the absence of support from the Centre. The CM announced a 25 per cent cut in existing entitlements for petrol expenses of all government departments, except the frontline departments of health, medical education, police, food and agriculture.
 

In his letter to the PM, the Punjab CM suggested the Fifteenth Finance Commission should be requested to recommend a special Covid-19 revenue grant for the year 2020-21. He said since this grant would increase the fiscal deficit of the Centre, it could be financed through a special borrowing programme outside the ambit of the FRBM provisions. He also proposed increasing the deficit to make up the revenue shortfall.
 

Rajasthan's Gehlot said he has asked a central team that visited him on Tuesday to convey to the PM about the need to start planning lifting the lockdown on May 3, which would avoid last minute confusion and pressure to extend it.

Gehlot said states needed urgent help as the poor could soon face starvation deaths. He also demanded financial packages for states, industry and traders. He said the state has 45 hotspots in 19 districts.
 

Gehlot said he has requested both the PM as well as the union home minister that state governments want inter-state transit of migrant workers should be allowed soon, but it was unfortunate the Centre has failed to understand this. He said there cannot be one formula that fits all states, and there is urgent need to either find work for people or give them assistance. He also asked Centre for release of more foodgrains from its stockpiles.