Government must give financial help to states, Sharad Pawar said (File)
Nationalist Congress Party chief Sharad Pawar on Sunday wrote to Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman over additional funds for Maharashtra, and said the states will play a major role in the economic recovery of the country after the coronavirus lockdown gets over. He also warned that in the absence of any fiscal help, the states will not be in a position to supplement the central government's efforts to defeat COVID-19.
"It is imperative that in these testing times the Government of India should offer suitable financial assistance to states also. The Government of Maharashtra requests additional grants of untied nature to the tune of 1 lakh crores for the Financial year 2020-21," he wrote in the letter.
"In the eventual recovery of Indian economy, the states will play a major role and if left without any help, the states will not be in a position to supplement the required national government efforts," he added.
Mr Pawar, the leader of the party which is running a coalition government with the Congress and Shiv Sena in Maharashtra, also demanded that the centre extend the two-year moratorium on the state's loan repayments.
"The state makes repayment of Rs 10,500 crore every year on account of the NSSF loan given by Government of India. It is requested to extend two-year moratorium on loan repayment. It will help in bridging the likely budgetary gap," he added.
Arguing that the centre's borrowing will be cheaper than the states', Mr Pawar said the government should not be averse to deficit financing.
Prime Minister Narendra Modi had announced a complete nationwide lockdown last month to arrest the growth in the number of coronavirus cases in the country. Most of the businesses have been shut since, public transport suspended and movement of people severely restricted.
In the absence of economic activity, revenues of the states are likely to be hit drastically.
Maharashtra is the worst-hit state in the country with 7,628 coronavirus cases, including 323 deaths.