Exactly after one month since the first Janata Curfew was imposed, followed by total Lockdown 1.0 and the continuing Lockdown 2.0, the Strategy of Modi Govt has become more than clear.
Central Govt has very carefully excused itself from taking the lead role or even extending required financial or material help to the States.
Our Covid-19 Heros are:
- State Govts
- Govt Employees direct and indirect
- Medical Staff
- Police Force
- Cleaning Staff
- Supply Chains
- Social Workers
State Govts are working day and night and ensuring essential commodities, monetary help, food for the migrant workers etc. are reaching the needy people with maximum efficiency.
They are also shouldering that the responsibility of successful and peaceful Lock down.
State CMs are fighting many battles at a time…
- Financial Crisis
- Sourcing Testing Kits
- Sourcing PPEs and disposables
- Quarantine to Isolation
- Maintaining Essential Services
- Finding ways to contain the spread
- Most importantly maintaining an overall positive atmosphere
Keeping people healthy both medically and emotionally is more challenging than fighting a war…must appreciate each and every individual contributing towards the better tomorrow.
Now let’s see what has Modi Govt done for the States!!
Allowed 17,289 Crores to be utilised from the State Disaster Response Funds of 28,983 Crores, still holding over 11,500 Crores.
When GST was implemented States had asked for GST Compensation in should the State income reduce, for which a GST Cess was levied on us and over 53,000 Crores are lying in the consolidated funds. Two month’s GST compensation dues are still pending to the States from the Central Govt.
Under National Health Mission the normal allocation has been released, there’s nothing from the Centre to fight Corona Pandemic.
Modi ji made us all Clap, Bang Utensils.
Gave emotional speeches.
Worked on his PR
Made us light Diyas, Candles.
Gave 500/- to some distinguished Jandhan account holders for PR.
During the meeting with the Prime Minister, all the State Chief Ministers requested him to extend Financial help, because Sates cannot fight this pandemic without active support from the Central Govt.
What are the bottlenecks for State Govts?
Post GST States have lost their rights to levy additional taxes.
Their primary sources of income are Petroleum, Alcohol, Motor Vehicles, Land Registrations etc.
Due to lockdown there are no Registrations, no Alcohol sales and very negligible Petroleum products consumption.
GST dues from the Centre also don’t come in time. Other dues under various heads are also not being cleared by the Centre.
States are not allowed to borrow more than 3% of their GST revenue under Fiscal Responsibility and Budget Management FRBM.
States are not having the powers to Monetise the Fiscal Deficit, which means they cannot ask RBI to print Currency equivalent to the Fiscal Deficit.
States do not have additional income sources like the Customs Duty, Direct Taxes, Corporate taxes.
They also do not have the facilities to access surplus fund or reserves from the RBI
What should the Central Govt do to help the States in this difficult deficit times?
Allow the State’s to borrow upto 5% of GST revenue.
Increase the borrowing limits and extend loans at very low rate of Interest if not zero% from the RBI.
Create Covid19 Grants to the States.
Central Govt will be quick in saying where is the money?
Well we have the answer to that also
Due to low Crude prices in the international market Modi Govt made 3.5 lakh crores only in 2019-20 and the total revenue since 2014 is 20 lakh crores. Which govt has not told us where was it spent.
Collection of different types of Cess has over 3.6 lakh crores lying in the consolidated funds.
Modi Govt is receiving International Covid-19 Donations and Grants which are being carefully routed into PM Care funds..
Through CSR exemptions only on donations to PM Care Funds, he has ensured non of the Corporate houses in India donate to CM Relief Fund.
Will Modi Govt take the lead role in this fight against pandemic or will it be busy buying MLAs and toppling Govts?
Let’s wait and watch!!