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Centre’s stimulus package is a big zero for us: West Bengal CM

Abhishek Law Kolkata | Updated on May 18, 2020 Published on May 18, 2020

West Bengal Chief Minister Mamata Banerjee   -  PTI

“Stringent conditions” laid down on States to allow additional market borrowing under the Fiscal Responsibility and Budget Management Act is against the federal structure. The conditions, in fact, may allow greater intervention of the Centre in state matters, said West Bengal Chief Minister, Mamata Banerjee.

Finance Minister, Nirmala Sithraman, had announced that States could borrow up to 5 per cent of their GSDP/GVA, as against the existing 3 per cent, under the FRBM Act.

“States have got absolutely nothing from the Centre’s stimulus package. It continues to be big zero for us,” said Banerjee, pointing that conditional raising of market borrowing limit was “of no help either”.

 

Only 0.5 per cent of the 2 per cent additional borrowing being allowed for a year, is unconditional. The remaining 1.5 per cent is subject to conditions. Even of the 1.5 per cent, 1 per cent additional borrowing will be allowed in four tranches of 0.25 per cent each, subject to fulfillment of the conditions. A further 0.5 per cent will be allowed if at least three out of the four areas, are achieved. “These conditions bulldoze the federal structure,” she said, indicating that West Bengal will not be following them.

The four main conditions include universalisation of ‘One Nation One Ration’ card, Ease of Doing Business, power distribution and ramping up revenues of urban local bodies.

A ‘One Nation One Ration’ card scheme has been vehemently objected to by the West Bengal Chief Minister and has put her foot down on imposing any new “urban local body tax” like water tax or sewerage tax.

“So the effective increase for us (who will not accept the conditions) will be 0.5 per cent. It is nothing,” said Banerjee.

Amongst the debt-stressed States, Bengal had been at the forefront demanding that market borrowing limit be increased to 5 per cent (of GSDP) from the existing three per cent under the FRBM Act.

Bengal’s revenue loss for April stands at ₹5,000 crore.

Fresh relaxations

The State has also announced a new set of relaxation in lockdown rules in its bid to restore economic activity, even as the Covid-induced lockdown entered its fourth phase.

Containment zones across the State — which includes Kolkata — will be further sub-divided into three categories with there being no economic activity in high risk areas, while varying degrees of relaxation will be granted in some.

Kolkata, and its neighboring regions of Howrah and North 24 Parganas remain the worst Covid-affected districts. Covid-19 cases in Kolkata have already crossed 1,000. The city also has the highest number of containment zones.

Big shops, salons, beauty parlours will be operational from May 21, but social distancing norms and sanitization procedures have to be followed. Smaller neighborhood stores or standalone shops in a locality have already been allowed to operate for some time now.

Hawker markets will be operational post May 27, and on an “odd-even basis” after the modalities are worked out. Offices can operate with 50 per cent workforce.

Permissions have also been given to hotels to commence operations. Sports activities may take place without any audience. Gyms, bars, restaurants, cinema halls and shopping malls will remain closed.

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Published on May 18, 2020
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