Nothing new in Centre's announcement of more money to states for migrant workers welfare:Vijayan

Kerala Chief Minister

Pinarayi Vijayan on Fridaysaid there was nothing new in the announcement of the Centre's allocation of more money to the states for the welfare of migrant workers and the amount allocated to the Disaster Relief Fund was just a share of the Centre.

Vijayan said the 15th Finance Commission had allocated a central share of Rs 314 crore to Kerala but the State has only half of it, Rs 157 crores.

"We have asked the Prime Minister to allow special grants to the states in the context of COVID-19 situation and make this an additional consideration for inclusion in the Second Report of the 15th Finance Commission.

 

It is inappropriate to portray the central contribution to the Disaster Relief Fund as help for COVID-19 prevention," Vijayan said.

He reiterated the demand of the state to increase its borrowing limit from the current 3 per cent to 5 per cent.

"There is nothing new in the announcement of the Union Finance Minister's allocation of more money to the states for the welfare of workers working in other states.

The amount allocated to the Disaster Relief Fund is just a share of the Centre.

The 15th Finance Commission had allocated a central share of Rs 314 crore to Kerala but the State has only half of it, Rs 157 crore," Vijayan said.

The chief minister said the state needs a hike in the borrowing limit to overcome the financial constraints as there has been a drastic fall in the revenue collection due to the COVID-19 induced lockdown.

"The Centre has recently increased its borrowing limit to 5.5 per cent but the state's limit is still at 3 per cent.Despite repeated requests, the Centre has not bothered to increase the borrowing limit.

It is not in line with the basic principles of a Federal system," Vijayan said.

He also said that from the Disaster Relief Fund, the state has already given Rs 17 crore to District Collectors for relief work and Rs 15 crore to the Health Department for buying medical equipment.

"As per the norms, only 25 per cent of the state's outlay can be spent on relief work and 10 per cent on purchasing equipment.Only this much can be used from SDRF amount.

The state is using budgetary amounts to distribute welfare pensions," Vijayan said.

The State Planning Board and the Gulati Institute of Finance and Taxation (GIFT) have been tasked with conducting a study on the economic impact of the state following COVID-19.

Vijayan said as per the GIFT report, it is estimated that there will be a revenue loss of Rs 35,455 crore and the revenue and fiscal deficit will increase if the expenditure, including social welfare expenditure, stays the same.