Chennai: Tamilnadu Chief Minister Edappadi K Palaniswami today urged the Union government to grant Rs 9,000 crore to the State for coronavirus impact relief works after borrowing from Reserve Bank of India.
In a letter to Prime Minister Narendra Modi, a copy of of which was released to the media, Palaniswami said the Central government should provide Rs 1 lakh crore to State governments based on the size of a state’s Gross State Domestic Product (GSDP) to the national Gross Domestic Product (GDP).
Palaniswami said that this should be in addition to the other forms of financial transfers to the States envisaged in the Union Budget and can be financed by the Government of India borrowing from the Reserve Bank of India.
“I request that the Government of India, in addition to permitting the additional borrowing by State Governments, should provide an aggregate amount of at least ₹1 lakh crore as a special grant to the State Governments to combat the COVID-19 virus and its aftermath. This needs to be in addition to the other forms of financial transfers to the States envisaged in the Union Budget and can be financed by the Government of India borrowing from the Reserve Bank of India,” he said.
The Chief Minister suggested that the funds can be distributed in proportion to the size of each state’s GSDP (Gross State Domestic Product) to the national Gross Domestic Product.
“The expenditure out of this grant will also pump prime the economy and lead to its revival. I request that Tamil Nadu may be given a grant of ₹9000 crore under this special dispension,” he added.
“Under the Indian public finance system, only the government of India can in an eventuality, borrow freely from the monetary authority, the RBI,” Palaniswami said.
“The economic impact of the lockdown is likely to be very severe and unprecedented. Such difficult times call for unconventional measures to ensure that the economy is revived and re-invigorated,” Palaniswami stated.