Coronavirus Lockdown: States to Ask Centre for Release of Funds it Owes Them

At a time when the Food Corporation of India (FCI) is moving out a record amount of grain from its existing stock to compensate during the lockdown, the Chief Ministers of several states are scheduled to ask Prime Minister Narendra Modi today that the Centre releases funds it owes the states. 

According to The Indian Express, several states, including the likes of Maharashtra, Punjab, West Bengal and Rajasthan are dealing with a financial crunch. An already distressed economy is having to deal with the economic setback of a 21-day lockdown period due to the coronavirus and large-scale migrations of the economically disadvantaged who are moving back to their villages. 

The IE report mentions that several states had already written to the PM asking for their dues to be cleared, and that the matter would be raised again through video-conference on Thursday. A senior state government official told the newspaper that only eight CMs were allowed to speak at the last meeting despite all being present. Officials reportedly said that several states were distrustful of the Centre after having to deal with a lockdown that they were not consulted on, with states now shouldering the responsibility of the migrations that ensued. 

An official with the Chief Minister of a state said that he Home Ministry had advised them to use money from the SDRF (State Disaster Response Fund) for relief. “But for many states, the SDRF is just a book entry. Money is fungible. With huge bills pending at the Centre’s doorsteps, most states have utilised money parked under different heads,” the official was quoted saying. 

The newspaper quoted another official saying that Maharashtra had already written to the Centre for Rs 25,000 crore, out of which Rs 18,000 crore was GST compensation. The Centre had also asked states to tap the Rs 31,000 crore from the Building and Other Construction Workers welfare cess. Officials of the state government told the newspaper that the amount was for registered construction workers and that many had already left for their homes. 

An official also told the Express that states like Odisha, Andhra Pradesh and Rajasthan have taken the unprecedented step of deferring or cutting salaries. With revenues drying up, the books of many state governments reportedly do not make for good reading. 

The states are also exerting pressure on the Centre at the time of a pandemic which resulted in a sudden lockdown. It resulted in mass migration which the Centre had to try and manage with an economic package announced by Finance Minister Nirmala Sitharaman on March 26. 

A report in The Times of India elaborates on how the government is now in a race against time to ensure that more than half the country does not go hungry soon. 

On Tuesday, March 31, the FCI reportedly moved a record 58 rakes with 1.6 lakh tonnes of wheat and rice. The average for a day is said to be between 30 and 25 rakes with between 53 and 55 rakes expected to leave grain-surplus states like Punjab, Haryana, Andhra Pradesh and Telangana. Since last week, when the government announced an extra 5 kg of grain to be given to those in need every month, the FCI has moved over a million tonnes of grain in over 350 rakes at a reported average of 40 a day. 

FCI chairman D.V. Prasad told the newspaper that it had adequate stock of grain, enough to meet requirement of states including the additional 5 kgs. The FCI plans on moving 5 million tonnes of grain in April.