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Increase state borrowing limits: West Bengal to Centre

Increase state borrowing limits: West Bengal to Centre

Kolkotta: The West Bengal government on Friday suggested that the borrowing limits of states be raised to 5 per cent of the gross state domestic product without any conditions.

In a letter to Union Finance Minister Nirmala Sitharaman, state Finance Minister Dr Amit Mitra wrote, "You are aware that just like last year, there has been (a) sudden dip in revenue, threatening the financial viability of the states. In our case, we have been hit by a double whammy - of the second wave of Covid-19 and the Cyclone Yaas." He further expressed disappointment over the proposal of hefty Goods and Services Tax on items to counter COVID-19 at the GST Council meeting held on May 28.

The Centre had earlier relaxed the borrowing limit of states to 4 per cent without any conditions and up to 5 per cent, conditional on certain achievements. "But for the current financial year, annual borrowing limit has been fixed at four per cent of GSDP, out of which only 3.5 per cent is unconditional, and 0.5 per cent is linked to capital expenditure targets," Mitra said. "In view of the present impasse and the anticipated 3rd wave (of the pandemic), I once again urge you to allow the borrowing limits of states to be raised to 5% of GSDP without condition."

"I am taken aback that after a year like 2020-21, it is being expected that our capital expenditure would not only be back on track but increase by more than 100 per cent since 2019-20," he added.

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TAGS:GST council Borrowing limits Indian Economy 
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