CM Ashok Gehlot writes letter to Prime Minister requests to provide a grant of rs.1 Lakh crore to all the States

Jaipur, March 28. Chief Minister Ashok Gehlot wrote a letter to Prime Minister Shri Narendra Modi and requested him to take certain measures including inter-alia-making available a grant of Rs. One lakh crores to the states in the wake of ongoing lockdown due to COVID-19 pandemic which has adversely affected the poor people.

The first installment of grant should be given to the States based on per person population. Later the grant amount can be given more to the States where infection is high and proportionally to the remaining States, he wrote.   

Chief Minister while extending gratitude to the Prime Minister for the Government of India for announcing economic package looking to the COVID-19 pandemic said that the Government of India and States have to jointly fight this pandemic.

 Gehlot in his letter wrote that the Government of India should direct Reserve Bank of India to provide Rs. 1 lakh crore to States as an interest-free ways and means advance. This should be done for 11 months from April 1, 2020. He has mentioned that economies of the States have been adversely affected due to COVID-19 pandemic.

Looking at the huge decline in tax and non-tax revenue, he wrote that permission for an additional 2% credit limit should be given immediately from Net Credit Limit which the States get.   

Chief Minister further wrote that the Government of India has the power to give directions to apex level institutions such as Reserve Bank of India. The States expect that the Centre should grant moratorium of at least three months in the payment of installments due to RBI and financial institutions under the Government of India.

He said looking to the current situation of Bond Market, the development loan of State is available on higher interest rate compared to the Government of India.

Looking to the expenses to deal with COVID-19 pandemic, the Government of India should take new loans at its level and should provide as advance loan to the States. He has asked to take this measure as a last resort. 

Gehlot said that lockdown is continuing in the entire country due to prevent the spread of COVID-19 infection which has created crisis to livelihoods of people. To save people from starvation, the Rajasthan Government is making all possible efforts to maintain the supply chain of essential items along with in the direction to provide cash and necessary amount to the weak and deprived section of the society. 

Chief Minister in his letter wrote that the State Government by increasing expenses in the health sector has taken measures with full capacity to stop the effect of this pandemic. Despite the efforts being made to fight with this disease, the State has its limits to raise new resources.

The Government of India has the power to use monetary, fiscal and credit policies to raise finance, which the State Governments do not have. Therefore the States should be provided with sufficient financial resources to deal with continuously changing situations due to COVID-19.
 

Gehlot also wrote letter to Chief Ministers of various States citing the letter sent to the Prime Minister and requested them to take up these issues with the Government of India at their level, so that in the spirit of cooperative federalism, all the State Governments’ resources are adequately augmented by the Government of India, which would strengthen the State Governments in their fight against COVID-19 pandemic.