JAISALMER: Cash-strapped states, including Punjab and Kerala, Friday pitched for special packages from Centre, amid demands across the political spectrum to increase funds available through the interest-free 50-year loan, but with fewer conditionalities.
Another common theme during finance minister Nirmala Sitharaman’s pre-budget consultations with states was central support for dealing with natural disasters, a pitch that was heard from Bengal & Himachal Pradesh to Goa, indicating how states had to contend with significant damage due to calamities. Several states underlined need for additional allocation for State Disaster Response Fund, a source said.
Bengal sought that half of the 50-year loan be used to combat natural disasters.
Sitharaman responded by saying that Centre had allocated an additional Rs 30,000 crore as “untied funds” under the special assistance scheme in 2024-25. Besides, an additional window is available for states hit by a disaster of a severe nature to assist in their efforts for reconstruction of damaged roads and bridges, water supply lines and electricity poles. “The states which suffered a natural disaster of severe nature in FY 2024-25 may be eligible for up to 50% of their allocation under Part-1 (Untied) of SASCI scheme. This amount will be in addition to the funds provided under National Disaster Response and Mitigation Fund,” said an official statement quoting Sitharaman.
While each state had specific demands – if Bihar deputy CM Samrat Chaudhary wants funds for a new expressway, then Goa CM Pramod Sawant is seeking higher capacity for Konkan Railway, Kerala cited fiscal stress to demand a special package, blaming Centre for its woes.
“We reiterate our demand for a special package of Rs 24,000 crore to tide over the current liquidity stress by scheduling it over a period of two years from 2025-26,” Kerala finance minister KN Balagopal said, besides asking for an increase in the borrowing limit from 3% of GSDP to 3.5% without any strings attached. He also sought another Rs 2,000 crore due to the Wayanad disaster and Rs 5,000 crore to improve rail connectivity, an industrial corridor and other facilities from Vizhinjam port being built by Adani.
Punjab invoked its status as a border state to demand an industrial package on the lines of J&K, with state finance minister Harpal Cheema asking for another Rs 1,000 crore for building infrastructure to check the entry of drones from Pakistan.
There were also requests to increase the honorarium paid to ASHA workers with some of the states also asking the Centre to bear a larger share of land acquisition costs for projects.
