In addition to a comprehensive stimulus package, To fight Covid 19 pandemic, Indian states want center’s support in 5 areas. With their own strategies, Indian States are fighting Covid 19 too.
What do the states want?
Sufficient funds and greater autonomy to deal with the crisis have been two major demands of the states since the nationwide lockdown began on March 25. Prime Minister Narendra Modi has had five meetings with the state chiefs so far and discussed issues concerning the crisis.
With the lockdown’s third phase nearing the end on May 17, Modi on Monday asked the chief ministers to share their suggestions on moving forward from the pandemic and resuming economic activities.
“Had an extensive meeting with CMs. Each CM shared their perspective on battling COVID-19,” Modi tweeted soon after the meeting. Addressing the nation on Tuesday evening, he announced Rs 20-lakh crore package to revive the economy.
Had an extensive meeting with CMs. Each CM shared their perspective on battling COVID-19.
We discussed the way ahead in the post-COVID era, the challenges in healthcare, education and other sectors. https://t.co/0SZptVbzAF
— Narendra Modi (@narendramodi) May 11, 2020
Indian states want center’s support in 5 areas as India paves the “Route to normalcy”:
It’s not an exaggeration that the lockdown has changed the everyday lives of people for ever, especially causing immense hardships and penury for migrant labourers. Bedsides fighting the pandemic, bringing back normalcy has become an imperative for the states. This calls for enhanced coordination and collective efforts between the states and the Centre.
Let’s focus on five major areas where the states can avail off the Centre’s help to resume the economy and let normalcy return.
Demarcation of containment zones
The Centre, based on the number of positive cases, had classified districts into red, orange and green zones soon after the first phase of lockdown ended on April 15. However, the states sought more autonomy in demarcating the zones citing that they are working on the ground and a unilateral decision by Delhi might prove faulty. Punjab chief minister Captain Amarinder Singh and his Bengal counterpart Mamata Banerjee have been quite vocal in this issue.
“Red zones will be further broken into categories – a, b, c. Police will figure it out,” the Bengal chief minister tweeted on Tuesday. Following Monday’s meeting, the Prime Minister agreed to give more power to the states in declaring their own containment zones.
Restarting industry and transportation
Since India is diverse with different states having their own unique ways of handling the situation, offering autonomy to them was essential to resume industrial activities and transport facilities. While the Delhi government is planning to begin 20 passengers in each bus with alternate seats kept empty, the Bengal government has decided to run state-owned buses from May 18. During Monday’s meeting Kerala CM Pinarayi Vijayan raised the issue of giving more freedom to the states in terms of resuming commercial activities and public transports. Similar demands were echoed by the chief ministers of Telangana and Chhattisgarh among others.
The chief ministers of Tamil Nadu, Telangana, Bihar and Andhra Pradesh criticised the Modi government’s sudden decision to run passengers trains. Tamil Nadu CM K. Palaniswami said no train or air transportation should be launched in his state till May 31 as it still was battling surge of infections.
Funds boost to MSMEs, tweak in FRBM Act
The states have been asking for funds boost to micro, small and medium enterprises (MSMEs) and welfare of migrant workers. On Wednesday, finance minister Nirmala Sitharaman announced a series of economic reforms for this sector, underlining the importance of self-reliant or “Atmanirbhar Bharat” as prescribed by Modi. In a major initiative, the Centre announced Rs 3 lakh collateral-free automatic loans for this sector.
States like Rajasthan, Tamil Nadu, Bihar, Kerala have sought relaxation of the fiscal deficit target by another 1-2 per cent from the present 3 per cent of the gross state domestic product as per the Fiscal Responsibility and Budget Management Act. According to finance experts, the idea is to create more breather to the states to deal with their respective monetary issues.
Hiked MGNREGA wages
The plight of migrant workers and daily wage labourers is one of the major concerns for India. Since the nationwide lockdown began on March 25, chief ministers of Rajasthan, Chhattisgarh, Jharkhand and West Bengal wrote to the Centre, seeking extension of work days by 50 per cent along with increased wages for workers under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). The states argued that this step will help the labourers return to their native land and survive the crisis without losing their livelihood.
Uttar Pradesh chief minister Yogi Adityanath on Tuesday set the target of over 50 lakh MGNREGA jobs by May end for its 24 lakh workers across the state. The chief minister also raised the income of its workers in rural areas from Rs 3630 to Rs 6000 along with arrear benefits.
Quick release of central funds
The states have been in dire need of funds as the usual revenue collection has ceased owing to lockdown. The expenditure to keep the healthcare facilities going has risen like never before. While Tamil Nadu and Bihar sought benefits recommended in the 15 Finance Commission to be extended in advance, Maharashtra asked for early release of its share in the central funds. As per the Goods and Services Tax law, the Centre is liable to compensate the states till 2022 for losses incurred over the tax system.
With Punjab and Delhi already raising its voices for clearance of dues, other states can press for similar demands in the due course of time.
The chief ministers of non-BJP states such as Bengal, Maharashtra and Himachal Pradesh have criticised the Centre’s economic reform plan. The Bengal CM slammed the Modi government’s measures regarding income tax, real estate and EPF contribution as a “big zero”. Leading economists, including Nobel laureate Abhijit Vinayak Banerjee, have been advocating for distributing cash among the poor and lower middle class groups. However, the experts hailed the first tranche of fiscal stimulus extended by the central government that promised to release more such packages over the next few months.
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