Odisha asks Centre to allow states to breach fiscal deficit target

BHUBANESWAR: Considering the “war like times”, Odisha has urged the Centre to not hesitate in breaching the fiscal deficit target and also allow states to do so.
It also wants an early release of funds, particularly for social protection schemes such as Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA), old age pensions, rural and urban national health missions, and Integrated Child Development Services for example.

Attending the Prime Minister’s video conference on behalf of Chief Minister Naveen Patnaik, Biju Janat Dal MP Pinaki Misra pointed out that India’s commitment to the fight the Covid-19 pandemic and its economic fallout had been less than Rs 2 lakh crore. “While most advanced countries have committed almost 10 per cent of their GDP towards the corona fight package, India had so far committed Rs 1.75 lakh crore towards the poor and Rs 15,000 crore towards the health package, in total less than Rs 2 lakh crore. We are a $2.7 trillion economy and should be spending a bare minimum $ 250 billion or Rs 16 -17 lakh crore towards fighting Covid19 and its economic impact,” said Misra.

Money would be needed in the pockets of migrant workers and in the pocket of their employers too for them to be in a position to employ them again. Misra argued that India at the moment had a bullish foreign reserve quotient, good gold reserves and oil prices are at all-time low. “A whole amount of refinancing will be needed for the MSME, the airline industry, the hospitality industry, the real estate sector... we would need to subsidise the economy in its entirety for the next three four months. Therefore the time has come for breaching the self-imposed fiscal deficit barrier we put in place because these are war like times,” said the Puri MP.

He also suggested that MP LAD funds which the Centre had suspended for two years be credited into respective Chief Minister's relief funds so that it could be put to use immediately in the states that the MPs had been elected from. Misra also urged the PM to personally intervene to ensure all non-essential expenditure by the Centre was stopped.

The fight against the epidemic had seen states put aside their political differences to join hands with the Centre. This was a great example of 'cooperative federalism' said the MP, recalling PM Narendra Modi’s 2014 slogan. Speaking to the media after the conference, he said, he believed the countrywide lock down could be extended. “Most chief ministers were for extending this lock down. In his summary the PM said that all advice and feedback he was getting was that it would not be possible to lift the lock down immediately.” Promising Odisha's support to whatever the decision was on a possible extension of the national lock down, Misra asked for states to be allowed flexibility in deciding exit strategies on, for example, to what extent air and rail connectivity could be allowed.