Increase states’ compensation period by 5 yrs, says Bengal FM Amit Mitra

NEW DELHI: The compensation period to states should be extended for another five years while their borrowing limit needs to be raised to 5% of GSDP (gross state domestic product), without any conditions to enable them to carry on vaccination and deal with damages caused by cyclones, West Bengal finance minister Amit Mitra has urged Union finance minister Nirmala Sitharaman.
In a letter to Sitharaman, Mitra raised five points including the need to revise projections of the gap to be funded through borrowings which according to the state’s calculation is estimated at Rs 2.13 lakh crore and not Rs 1.58 lakh crore as estimated by the Centre.
“Further, as GST revenues have not stabilised yet and state finances are reeling under the numerous stresses of Covid-19 uncertainties and natural calamities, I would also urge you to extend the compensation period for another five years beyond July 22,” Mitra said.
Mitra also said that going by the actual revenue collections over Rs 63,000 crore is due to the states for the 10-month period from April 2020 to January 2021. He said that West Bengal has a compensation of around Rs 4911 crore for fiscal year 2020-21.