Kerala, Telangana Slam Centre's Financial Package for States amid Coronavirus Lockdown

File photo of Kerala CM Pinarayi Vijayan.

File photo of Kerala CM Pinarayi Vijayan.

The bulk of the Rs 20 lakh crore was the amount made available to banks as part of the RBI's monetary policy and the amount these banks are expected to pay to farmers and small businesses, Viayan said.

  • News18.com
  • Last Updated: May 18, 2020, 10:47 PM IST
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Kerala Chief Minister Pinarayi Vijayan on Monday said that the five-phased financial package announcements by Union Finance Minister Nirmala Sitharaman had nothing for the public healthcare sector.

During this pandemic situation, a substantial public healthcare package was required, he told reporters. "Many international agencies have pointed out that the package will cost an additional Rs 1.5 lakh crore from the central budget this year. Even if we add free ration and direct cash transfer to ordinary people, it would not have been five per cent of the total package", he said.

The bulk of the Rs 20 lakh crore was the amount made available to banks as part of the RBI's monetary policy and the amount that these banks are expected to pay to farmers and small businesses, he said.

The reality is that banks are wary of giving loans during the present financial uncertainty, he said, adding that the Centre had opened up most sectors for private investment while the public sector will be limited to some strategic areas. However, strengthening public sector Units is the Kerala Governments policy, Vijayan said.

The state government had earlier announced a package for the Micro-Small and Medium-Sized (MSME) sector and this will be implemented in conjunction with central announcements, the Chief Minister said.

The government will take immediate steps to make maximum use of the credit facilities announced by the central government for MSMEs.

Kerala will take full advantage of the Rs 40,000 crore increase in the budget allocation for the Mahatma Gandhi National Employment Guarantee Scheme, he said.

Steps have also been initiated to utilise the additional refinance fund available to Kerala Bank and the Kerala Grameen Bank through NABARD with the Department of Agriculture, Animal Husbandry and Fisheries, Local Self Government and Self Help Groups, Vijayan said.

While welcoming the increase in borrowing limit of states from three to five per cent of the GDP, he said the pre-conditions laid down by the Centre, however, were not acceptable in the federal set up.

"Kerala has been in the forefront in demanding a hike in the borrowing limit of the states and we welcome this decision. But we are not happy with the conditions set for the use of the increased limits", he said.

The states' domestic revenues have fallen drastically during the crisis. So even if the borrowing limit was increased, it will be of limited benefit. Such preconditions are not acceptable in a federal set up, he added.

Telangana Chief Minister K Chadrasekhar Rao described the union government’s stimulation package as bogus and it is a jugglery of the numbers.

Telangana slams package as well

After a Cabinet meeting on Monday, Telangana Chief Minister K Chandrasekhar Rao said the Union government had announced Rs 20 lakh crores as support, but the amount is not even Rs 1 lakh crore in reality.

“Money should get into the hands of the states. They should not treat the states as a beggars. The Centre is trying to seize the powers of the states,” he said.

Rao slammed the Centre for increasing the Fiscal Responsibility and Business Management (FRBM) by 2% with "ridiculous" conditions amid the coronavirus lockdown.

(With inputs from PV Ramana Kumar in Hyderabad)

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