States need resources

During pandemic, Centre must not constrain states

In the design of its pandemic relief package, the Union government has been careful about the immediate fiscal impact. This is because it is facing a severe revenue crunch. The under-performance of goods and services tax predated the pandemic — but, naturally, the near complete standstill imposed by the lockdown will have further affected revenue. In her announcement of the package, Union Finance Minister Nirmala Sitharaman was right to note the fiscal problems the Union government was facing were also applicable to the state governments. In fact, many states witnessed revenues decline by up to 90 per cent in April.