Credit limit should be relaxed to 6 pc of GSDP: Chhattisgarh CM to PM Modi
May 01, 2020
Raipur (Chhattisgarh) [India], May 1 : Chhattisgarh Chief Minister Bhupesh Baghel on Friday wrote to Prime Minister Narendra Modi, seeking consent to relax this year's credit limit up to 6 per cent of GSDP and keep fiscal deficit at 5 per cent.
In a two-page letter, the Chief Minister stated that the implementation of the lockdown across the country has brought all economic activities to a standstill, causing huge revenue loss to the state.
"The nationwide lockdown has majorly affected the people belonging to financially weaker section, which constitutes a large population in the state," Baghel said.
He also stated that all the state departments were given a budget for fiscal year 2020-21 and financial resources were required for expenditures related to basic requirements.
"The Union Finance Ministry has approved 50 per cent of the net credit limit -- Rs 5,375 crores to the state for taking market loans in the first 9 months of this financial year. But this is insufficient for the expenses in the current situation," the Chief Minister said.
He added that his state is expected to receive less revenue this time due to the lockdown, which is why it requires relaxation in the net credit limit and the fiscal deficit limit for the state under the provisions of Fiscal Responsibility and Budget Management Act.
The Chief Minister said that Chhattisgarh is abiding by all the financial discipline ever since it came into being as a separate state. He informed that the state has the minimum loan burden (19.2 per cent of GSDP) and is paying minimum interest (7.4 per cent of total revenue collection).
Baghel further said that some extraordinary measures are imperative during disaster or emergency. "Hence, the state should be given relaxation in credit limit up to 6 per cent of the GSDP. Also, it should be allowed to keep the fiscal deficit up to 5 per cent of the GSDP," he said.
