The minister had included a list of states and the amounts given to each in his answer. Just to give a flavour of the kind of money involved, more urbanised states which had bigger caseloads got several hundred crore rupees – Maharashtra (Rs.592.82 crore); Tamil Nadu (Rs.773.24 crore); Delhi (Rs.651.41 crore) while largely rural and backward states got much less – Bihar (Rs.164.92 crore); Chhattisgarh (Rs. 74.21 crore): Jharkhand (Rs. 57.53 crore); Assam (Rs. 180.04 crore), etc.
In addition, the Central government has also revealed that 8,07,476 isolation beds, 1,74,533 Oxygen-supported beds and 42,988 ICU beds were added with the help of the package. This would have added a few dozen crore rupees to the expenditure. They also arranged about 409 lakh N-95 masks, 170 lakh PPE, and about 34,000 ventilators. All this was part of the Rs.15,000-crore package mentioned above, of which about Rs.11,000 crore only was actually spent.
Clearly, the Central government has dramatically underfunded the battle against the pandemic that is being waged by state governments. Spending Rs 51 per person – or, say, Rs.60 if other material help is included – is a far cry from what was needed.
The biggest help that state governments receive from the Centre is through funds to run the National Health Mission. One of the heads under this giant Rs. 30,000 crore mission is “Health Systems Strengthening”, which includes upgrading infrastructure, like hospitals, providing essential equipment, setting up hospitals, providing maintenance grants, etc. This would be crucial to fight the pandemic.
In 2020-21, the Central government approved Rs. 9,632.17 crore for this purpose, paring down what had been demanded by state governments in their State Action Plans. But shockingly, only Rs. 3,549.10 crore was actually spent, according to a Parliament response (unstarred Q.No.2337, Rajya Sabha) given on March 16, 2021. That’s about 37% of the money that was approved.
The state governments were, and continue to be, severely handicapped by shortage of funds. According to Reserve Bank of India’s analysis of state government budgets, revenue receipts (income) of state governments fell by a whopping 21% in 2020-21 compared with the previous year, which itself had seen a small decline of 0.7% over the year before that (2018-19). In other words, the coffers of state governments were empty.
So, the ability of state governments to mobilise resources was dramatically restricted by the pandemic and the Modi lockdown last year. In fact, the states’ fiscal situation was further weakened when the central government delayed release of the GST (Goods and Services Tax) compensation that it was statutorily mandated to give to each state.
The lockdown, declared without consultation and notice, completely destroyed state’s finances as the meagre sources of income dried up. No help was forthcoming from the Centre to tide over the unprecedented crisis. It was only later that the Centre allowed states to borrow more from the markets in order to meet their needs. This, of course, is no solution – it only meant that state governments further sank into more debt.
Leave a Comment