PM Modi Praises center-state Cooperation Amid Covid-19 Pandemic

The Centre announced that state governments would be allowed enhanced borrowing for 2020-21. PM Modi praised State Govt. Cooperation.
Image Credit: The Indian Express
Image Credit: The Indian Express

Prime Minister Narendra Modi on Tuesday praised the cooperation between the Centre and states amid the coronavirus pandemic. They were able to borrow significantly more in 2020-21 and raise an extra ₹1.06 lakh crore. PM Modi said, in a blog on LinkedIn, 23 states availed of additional borrowings of ₹1.06 lakh crore out of a potential ₹2.14 lakh crore.
"This significant increase in the availability of resources was made possible by an approach of Centre-State cooperation. When we formulated our economic response to the Covid-19 pandemic. We wanted to ensure that our solutions do not follow a 'one size fits all model,". PM Modi wrote in the blog "Reforms by Conviction and Incentives".

"For a federal country of continental dimensions, finding policy instruments at the national level. o promote reforms by State Governments is indeed challenging. But, we had faith in the robustness of our federal polity and we moved ahead in the spirit of Centre-State cooperation.

PM Modi launched the Aatmanirbhar Bharat package

PM Modi said in May 2020, as part of the Aatmanirbhar Bharat package. An extra 2 percent of gross state domestic product (GSDP) was allowed, of which 1 percent was made conditional on the implementation of certain economic reforms, he added.

This was a nudge, which PM Modi called "rare in Indian public finance", incentivizing the states to adopt progressive policies to avail additional funds. "The results of this exercise are not only encouraging but also run contrary to the notion.

The reforms were linked to "improving the Ease of Living to the public and particularly the poor, the vulnerable, and the middle class. Secondly, they also promoted fiscal sustainability".
PM Modi wrote that the four reforms to which additional borrowings were linked had two characteristics. The reforms were linked to "improving the Ease of Living to the public and particularly the poor and the middle class. Secondly, they also promoted fiscal sustainability", he said.

PM also added in his speech

"The second reform, aimed at improving ease of doing business, required states to ensure that renewal of business-related licenses. Under 7 Acts is made automatic, online and non-discretionary on mere payment of fees," he wrote.

"The third reform required states to notify floor rates of property tax and water & sewerage charges, in consonance with stamp duty guideline values for property transactions and current costs respectively, in urban areas. This would enable a better quality of services to the urban poor class, support better infrastructure, and stimulate growth.

The fourth reform was the introduction of Direct Benefit Transfer or DBT instead of free electricity supply to farmers.
This was a pleasant departure from the past and the Centre and states came together. To roll out public-friendly reforms in a short period amidst the pandemic. Officials who have been working on these reforms suggest that without this incentive of additional funds. The enactment of these policies would have taken years. India has seen a model of 'reforms by stealth and compulsion'. This is a new model of 'reforms by conviction and incentives," he said.

Like and Follow us on :

Related Stories

No stories found.
logo
Since independence
www.sinceindependence.com