AICC urges Centre to release ₹1 lakh crore special economic package to states to take on COVID-19

AICC spokesperson Supriya Shrinate on Saturday released a statement calling upon the Centre to decentralise and empower states to be able to deal with Covid-19 pandemic effectively.

“As number of Covid-19 cases rise in India, states are at the frontline of this battle so we urge the Centre to decentralise and empower states because the one-size-fits-all strategy cannot succeed. In a dynamic situation, real solutions to combat the disease and the economic calamity exist at the local level. Agility of states is key but states are starved for funds. States don’t have the same instruments to mobilize funds like the union government -- monetary, fiscal and credit policies -- even though real implementation of measures announced are being done by state governments,” she said.

She strongly urged the central government to announce a special economic package of at least Rs 1 lakh crore for states to combat the crisis, which can be made available to states on the basis of population and the extent of Covid-19 infections.

“States need money to set up quarantine facilities, testing, PPEs, thermal scanners, ventilators, air purifier, and consumables for government hospitals besides providing for the weak and vulnerable being impacted by the lockdown,” she said.

Shrinate flagged the delay of payment of GST compensation to states. “Of the Rs 48,000 crore pending in GST compensation only Rs 6,195 crore has been released so far. Due to the halt in economic activity states are facing further shortage in GST revenue. Several states including the BJP ruled ones have approached the central government seeking clearance of their pending tax dues,” she said.

She said it was crucial for the RBI to make cheaper loans available for states to borrow so that they have funds at their disposal to respond on a real-time basis. “The additional 30% increase in Way and Means Advances (WMA) for state governments announced by RBI comes at a high interest rate. This increase in borrowing limit must be made interest free,” she said.

She called upon the central government to play a proactive role to resolve inter-state supply chain management. “State borders are sealed and trucks loaded with essential commodities have been left stranded. This could lead to huge shortages in coming days. The central government must prescribe the required processes to keep supply chains intact,” said Shrinate.

She urged the government to create a national consensus by putting in place a structured consultative process between the Centre and states while formulating our strategy to deal with Covid-19 outbreak and the collateral damage of life and livelihood. “A similar consensus must also be arrived at by involving all political parties in key decision making at this crucial juncture than just unilateral announcements,” she said.

Shrinate pointed out that Congress-ruled states had been successful in taking on the pandemic by taking some steps at this critical juncture.

“Rajasthan government's handling of Bhilwara where extensive testing of over 7000 people was done with even mobile vans being deployed to test, has brought much relief there. The Rajasthan government's decision to defer water and electricity bill by 2- months will also bring respite. Similarly, Chattisgarh government's decision to test every person who has returned from overseas will help contain the crisis and the grant of 10 kg additional grains will bring relief to those most impacted by the lockdown. Punjab government's decision to give 2-months pension in advance to about 24-lakh old-aged, widows and disabled persons is bound to bring relief, 10 lakh food packets each with 10 kg atta, 2 kg dal, 2 kg sugar is being distributed to daily wage labourers among various other schemes that have been rolled out,” she said.

She concluded by urging the central government to walk the talk on cooperative federalism because the real battle was being fought at the state level and the states needed to be enabled to win.