Kerala Chief Minister Pinarayi Vijayan slammed the Centre on Friday for not increasing the borrowing limit of states, whose economies have been impacted due to the lockdown. He also asked the Centre to not portray its contribution to the State Disaster Response Fund (SDRF) as a relief grant to fight COVID-19.
“Due to the lockdown, the states have faced a lot of revenue loss. Our share of tax revenue has also reduced due to this. While the Centre has said that it will increase its borrowings by 54% in 20-21, which can raise its fiscal deficit to 5.5%, the borrowing limit of states have been unchanged,” he said. State's can only borrow up to 3% of their GDP and have been calling to increase this to 4%.
The CM added that not allowing states to borrow more to tide over the crisis goes against federal ideals.
With regard to the centre allowing states to use SDRF funds to fight COVID-19, he said, “This is the state’s rightful share of SDRF and has to be released regardless of the virus cropping up. It is nothing new. In the backdrop of the pandemic, we have demanded special grants be given to states to tide over the crisis. But merely releasing SDRF allowance and portraying it as assistance to fight the pandemic is not a good thing,” Pinarayi added.
As per the 15th Finance Commission’s recommendations, Rs 314 crore has been allocated to Kerala as the Centre’s contribution to the State Disaster Response Fund. Out of this, Kerala has already received Rs 157 crore, half of the share owed to it.
Pinarayi’s criticism followed Finance Minister Nirmala Sitharaman’s announcement on Thursday that the Centre would release Rs 11,002 crore of its SDRF contribution in advance to all state governments. The Centre also issued a directive in March asking states to make use of SDRF funds to procure equipment and quarantine people to fight COVID-19.
“We have used Rs 32 crore from SDRF, with Rs 17 crore released to district collectors for relief activities and Rs 15 crore to the health department to procure equipment. However, the rule states that the state should not spend over 25% of its SDRF allocation for the year,” Pinarayi added.
New novel coronavirus case
On Friday, Kerala reported 16 new cases of the novel coronavirus, taking the total cases in the state to 576. Among the new cases, five have been reported from Wayanad, four from Malappuram, two from Alappuzha and Kozhikode each and one each from Kollam, Palakkad and Kasaragod.
While seven of the patients flew in from abroad, four cases had returned from Tamil Nadu and two from Mumbai. Three patients were infected through contact.
Wayanad has emerged as the district with the most number of positive cases at 16. However, on Friday, the CM confirmed that Malappuram had the most number of suspected cases virus at 36. This is followed by Kozhikode at 17 and Kasaragod at 16.