New Delhi: In a pre-budget meeting with Finance Minister Nirmala Sitharaman on Wednesday, states have asked for more funds from the Central government to expedite infrastructure projects, raise grants to local bodies and share the burden of centrally sponsored schemes. Uttarakhand has asked the Centre for additional support of Rs 1,000 crore for Mahakumbh 2021 in Haridwar.
Delhi finance minister and deputy CM Manish Sisodiya said: "From 2001, Delhi gets only Rs 325 crore from Centre... Centre should give Rs 8,150 crore to Delhi and other UTs and Municipal Corporation be given funds from the Central pool."
He also said central government should come out with a policy on stubble burning and UP and Haryana should be given funds to subsidise farmers for stubble burning.
Himachal Pradesh industry minister Vikram Singh said state is facing problem in infrastructure development and has sought funds for stalled railways projects and development of funds under PMGSY for roadways.
"We have sought Rs 1,500 crore for roads," he said.
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Madhya Pradesh commercial tax minister Brajendra Singh Rathod said share of centre in centrally sponsored schemes is going down leading to stress on state finances.
Puducherry CM Narayan Swami said the farmers are in stress and central and told FM that burden should not be states alone. Puducherry should be at par with Delhi for devolution of funds. Central Government is lowering grant's for centrally sponsored schemes and their revamp should not be burdened on states.
Tamil Nadu deputy CM Paneer Selvam said the state government is yet to receive Rs 3,369 crore as grants to local bodies as prescribed by the 14th Finance Commission.
He asked for equal equity participation from Centre on Chennai Metro rail project.
Some states pitch for relaxation in fiscal deficit target to 4% to boost consumption
Some states have suggested Finance Minister Nirmala Sitharaman go for fiscal expansion and relax the deficit target to 4 per cent of the GDP.
The finance minister in her July Budget reduced the fiscal deficit target to 3.3 per cent from an earlier 3.4 per cent for 2019-20. Keeping in mind its fiscal deficit target, the government has stayed with the borrowing plan for the fiscal as announced in the budget despite a sharp cut in the corporate tax rate that is expected to cost Rs 1.45 lakh crore.
During the pre-budget consultation with Union Finance Minister, some states made a case for fiscal expansion by boosting consumption to tide over the sluggishness in the economy.
"The biggest take home from Pre- Budget discussion of FMs is suggestion by Bihar and Kerala to raise the fiscal deficit limit to 4 per cent. It was agreed to large number of states. In current year real expenditure of states will decline- a crazy macro outcome in time of recession," Kerala Finance Minister Thomas Isaac said in a tweet after pre-budget meeting here.
Some experts have already predicted that the fiscal deficit is expected to rise to 3.6-3.8 per cent of the GDP during the current fiscal due to weak revenue collections resulting from sluggish economic growth and government's sweeping corporate tax rate cut.
The country's fiscal deficit hit 102.4 per cent of 2019-20 Budget Estimate at Rs 7.2 lakh crore at the end of October. The fiscal deficit or the gap between expenditure and revenue was at Rs 7,20,445 crore as on October 31, 2019.
